...ArcelorMittal is a steel and mining company with a global presence in more than 60 countries. It is a leader in major global carbon steel markets such as automotive, construction, and household appliances to name a few. It is the combination of Arcelor and Mittal Steel, the latter being the origin of the present company. Mr. Lakshmi N. Mittal, Chairman and CEO of ArcelorMittal, started in the steel industry by building his first steel plant in Indonesia in 1976. This would form the beginning of Ispat International, while also establishing its parent holding company, LNM Group. In the 1980’s, still a minor player in the steel industry, Mittal looked to a new potential raw material source, DRI (Direct-reduced Iron). This had immense potential as production costs could be reduced by half while production volume itself could increase by tenfold. In 1989, Mittal leased one of the largest DRI suppliers, Trinidad & Tobago, and later bought it outright in 1994. As Ispat and LNM Group continued to expand over the next decade, Ispat acquired its parent, LNM Group, in 2004, and immediately merged with International Steel to form Mittal Steel, making it one of the largest steel companies in the world by volume and a major player in the steel industry. Mittal Steel’s growth finally led to the proposed acquisition, in 2006, of the world’s second largest steel producer in terms of production, Arcelor. After this successful acquisition, ArcelorMittal succeeded Mittal Steel and became...
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...Manikandan Tata’s Corus Valuation Introduction: Tata Steel was established by an Indian, Jamshetji Nusserwanji Tata in 1907. Though he died in 1904, before the project came to light, he sowed the seeds for a company that can stand the test of times. A century later, they took over Corus to become the 5th largest steel producer in the world. On January 31st 2007, Tata Steel took over Corus for USD 12.11 Billion. It took 9 rounds of bidding against a Brazilian competitor, CSN to seal the deal. The deal between Tata and Corus was officially announced on April 2nd 2007 at a price of 608 pence per common share in cash. It was a 100% acquisition and a new entity was born, to be run by one of Tata’s subsidiary in London. When the acquisition process started off in 2005, the initial offer was 455 pence and finally ended with Tata paying 608 pence, which is 33.6% more than the initial offer. This raises many an eyebrows about the final price. What transpired between 2005 and 2007? Was 608 pence/share a fair price? Steel Industry Tata Steel has its own mines and manufacturing units for the production of all kinds of steel. Steel is an alloy consisting mostly of iron, with carbon content between 0.2% and 2.1% by weight depending on the grade. Iron, like most metals, is found in the Earth's crust only in the form of an ore, i.e. combined with other elements such as oxygen or sulfur. Iron imputed with carbon forms steel. Carbon is the most cost-effective alloying material for...
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...Papers Home Page » Business and Management Steel Industries of Bangladesh In: Business and Management Steel Industries of Bangladesh STEEL INDUSTRIES OF BANGLADESH REPORT ON FOCUS The report “Bangladesh on its way of becoming self sufficient in rod production, export is also a possibility” by Shuvankar karmakar, that was analyzed here, was published in the Daily Prothom Alo, on 17th November, 2012. BACKGROUND Bangladesh Steel industry is emerging as one of the major industrial sectors of the country. It consists of small up to the largest scale of steel melting and re-rolling factories across the country that mostly produce deformed bar rod of different grade (40, 60, 500), angel, channel and coil for the construction industry. Though the history of Steel Industry is not older one but it can make a glorious future. Before 1971 Bangladesh did not have any steel mill and even after the liberation there were only a few steel factories in the country. In 1990s the actual development began in this sector through a revolution. During that period the building constructing agencies or developer companies came forward to build modern infrastructure. Then with the increasing demand, new investors started investing in steel or rod production. In 2012 we have almost 400 mills across the country including Dhaka, Chittagong. Although most of them are manual steel plants, 30 mills among them are automated. Many steel producing companies have gained reputation as a...
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...Discuss the trends in the steel industry and how it may impact Nucor’s strategy. Nucor Corporation started as a Nuclear Corporation of America. The latter was a highly diversified and marginally profitable company; the company products included instruments, rare hearths, semiconductors and construction. One of the company potential acquisitions was Coast Metals, a family owned producer of specialty metals. When the acquisition fell through, Nuclear hired one of the top engineers as a consultant to recommend other acquisition targets. Ken Iverson who was the president and CEO of the Nucor Corp. had strong technical skills and general management experience. The Nuclear Corporation of America was involved in the nuclear instrument and electronic business. The company went through many years of severe financial strains; he was responsible for the supervising the joist operations as well as the research, chemical and construction segments. Shortly after Iverson became the CEO of the company, he concluded that the best way to put the company on sound footing was to exit the nuclear instrument and electronics business and rebuild the company around its profitable South Carolina based Vulcraft subsidiary which was in the steel joist business. So Iverson moved the company’s headquarter from Phoenix, Arizona to Charlotte, North Carolina, in 1966 and proceeded to expand the joist business with new operations in Texas and Alabama. The company adopted the name Nucor Corp. in 1972, than...
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...Introduction VBF Tubing is the largest steel producer in the Netherlands. VBF produces welded steel tubing plants in three of its plants. These tubes find application in various fields ranging from structural components to gas, steam & liquid transmission. The major concern for VBF is their low inventory ($ 4.5 million) turning rate. Process i. Raw material preparation: Flat rolled steel is used as raw material, which is wound into rolls, unwounded, and then the start of one coil is welded against the end of previous coil. Continuous steel strip is then fed to tube forming & welding operation. ii. Tube formation: Two basis sizes called as ‘Mother Tubes’of 4 & 3 inch diameter. 4 inches in diameter accounted for 90% production. 3 inch mother tube produced over a 5 day period, only 3 times a year because it required a major changeover. iii. Stretch-reduction: Vast majority of 4 inch tubes are stretched & reduced in SRM machine into smaller dia. (0.5-2.5 inch). There is a production loss of 10 days when 4 inches are being cut. Production rates are minimum for smaller dials. iv. Finishing operations: Cost of storage of semi-finished tube is $400/ton. Various operations performed in finishing include zinc plating, threading tube ends, and adding caps before shipping to the customer. Problem Statement i. The inventory turnover is very low in spite of increasing demand. Excess holding of 3000 tonnes of finished goods indicates major problems in the sales operations. ii. 15...
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...AN ASSIGNMENT ON MERGER AND ACQUISITION OF Tata Steel and Corus BY Lokesh Bhatiya 09MBA02 SEMESTER 4 INTRODUCTION: STEEL INDUSTRY Contribution in the development of India’s economic growth: The Indian steel industry is more than 100 years old now. The first steel ingot was rolled on 16th February 1912 - a momentous day in the history of industrial India. Steel is crucial to the development of any modern economy and is considered to be the backbone of the human civilization. The level of per capita consumption of steel is treated as one of the important indicators of socio-economic development and living standard of the people in any country. It is a product of a large and technologically complex industry having strong forward and backward linkages in terms of material flow and income generation. All major industrial economies are characterized by the existence of a strong steel industry and the growth of many of these economies has been largely shaped by the strength of their steel industries in their initial stages of development. India is the seventh largest steel producer in the world, employing over half a million people directly with a cumulative capital investment of around Rs. one lakh crore. It is a core sector essential for economic and social development of the country and crucial for its defense. The Indian iron and steel industry contributes about Rs.8,000 crore to the national exchequer in the form of excise and custom...
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...BSRM Steels Ltd. Work Plan for SWOT Analysis Duration: 2 months (15th February to 15th April) Project Manager: Mr. Mahmud SWOT Steps/Activities | Data Sources | Data Collection Method | Responsible Person | Working Group | Logistics Supports | Required Fund | Timeline | Remarks | Analysis of General Environment | Primary & Secondary | Survey, govt. & regulatory publications, etc. | Mr. Adnan & Mr. Masud | 4 | Transport, survey instruments, technological support. | TK. 100,000 | 15th Feb to 14th March | Info gathered from both sources. | Analysis of Industrial Environment | Secondary | SEC publications, industry competitive analysis, business journal, industrial publications etc. | Ms. Shanila& Ms. Sinthia | 3 | Company’s database access, Technological support, analyzing tools. | TK. 70,000 | 15th Feb to 14th March | | Analysis of Internal Environment | Secondary | Company profile, minutes of meetings, financial statement etc. | Mr. Muhib | 2 | Factory inspection, company’s database access, analyzing tools. | TK. 50,000 | 15th March to 31st March | | Describing 1. General OT 2. Industry OT 3. Internal SW | Secondary | Findings from external & internal environment analysis | Ms. Tahmina | 1 | Technical support, fact finding tools. | TK. 20,000 | 1st April to 14th April | Describe the findings of previous steps | Strategic Conclusion | This work plan will be taken as cornerstone of SWOT analysis of BSRM Steels...
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...com ASBE 35th: Proceedings Page -401- Association for Small Business & Entrepreneurship 35th Annual Conference 3 ABSTRACT Nucor Corporation 2008-2009 is a strategic management case appropriate for first-year MBAs or seniors in an undergraduate capstone course. The focus of this case is the strategy of the most successful steel-maker in the United States as of 2008/2009. It has a difficulty level of five. Secondary issues include Porter’s Five-Forces Framework of industry analysis and the effects of the global economic slowdown in the last quarter of 2008 and the first quarter of 2009 on Nucor’s business. The case is designed to be taught in a single 75-minute class and is expected to require two to three hours of outside preparation by students. In order to facilitate students’ understanding of the economics of accounting figures, we have rearranged the balance sheet so that “earning assets” equal “permanent funding sources.” For real wealth to be created, the average return on earning assets must equal or exceed the weighted average cost of capital demanded by permanent funding sources. Nucor has been the most successful American steel maker for more than 35 years. It has a unique company culture and is recognized as the technology leader in its field. In an industry that is heavily unionized, Nucor’s work force is non-union. The company is also a textbook example of Porter’s Cost Leadership...
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...taken by an individual manager or by an organization at the strategic, functional or operational levels Reinventing a Giant Corporation: The Case of Tata Steel D V R Seshadri and Arabinda Tripathy A KEY WORDS Reinvention Change Management Turnaround Tata Steel Liberalization Response to Globalization t the meeting of the senior management of Tata Steel to celebrate the spectacular performance of the company, Mr. B Muthuraman, the Managing Director, recalled with satisfaction the remarkable strides that the company had made from the difficult days in the early nineties, when the company, used to a protected environment, was suddenly thrown open to global competition, consequent to the liberalization of the Indian economy. The company had closed the year with a record profit of Rs. 34.74 billion. A series of initiatives launched by the company over the last 15 years had culminated in these stellar results although there were many challenges at every step. At each stage in its journey, the company did what needed to be done. In retrospect, however, the various initiatives launched by the company over the years now appeared to fit into a coherent picture. The company had made steady progress over the years and had now achieved a pre-eminent status in the Indian steel industry. It had become one of the lowest cost steel producers in the world five years ago, a distinction that it had continued to maintain. All key performance indicators indicated that the company was in the...
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...teelIRON AND STEEL INDUSTRY IN INDIA Corporate Catalyst India A report on Indian Iron and Steel Industry OVERVIEW 1.1 Background The Indian iron and steel industry is nearly a century old, with Tata Iron & Steel Co (Tata Steel) as the first integrated steel plant to be set up in 1907. It was the first core sector to be completely freed from the licensing regime (in 1990-91) and the pricing and distribution controls. The steel industry is expanding worldwide. For a number of years it has been benefiting from the exceptionally buoyant Asian economies (mainly India and China). The economic modernization processes in these countries are driving the sharp rise in demand for steel. The New Industrial policy adopted by the Government of India has opened up the iron and steel sector for private investment by removing it from the list of industries reserved for public sector and exempting it from compulsory licensing. Imports of foreign technology as well as foreign direct investment are freely permitted up to certain limits under an automatic route. This, along with the other initiatives taken by the Government has given a definite impetus for entry, participation and growth of the private sector in the steel industry. While the existing units are being modernized/expanded, a large number of new/greenfield steel plants have also come up in different parts of the country based on modern, cost effective, state of-the-art technologies. Soaring demand by sectors like infrastructure...
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... Nucor Corporation was the most profitable steel producer in North America in both 2005 and 2006. It is regarded as a low-cost steel producer in the United States, and one of the most efficient and technologically innovative steel producers in the world. Nucor is known for its aggressive pursuit of innovation and technical excellence, rigorous quality systems, strong emphasis on employee relations and workforce productivity, cost conscious corporate culture, and ability to achieve low costs per ton produced (C-194). Offering a streamlined organizational structure, Nucor uses its ability to achieve incentive-based compensation systems that rewards goal-orientated individuals for their performance. Over the years Nucor has expanded progressively into the manufacturer of a wider and wider range of steel products, which has gotten it to be able to offer steel users one of the broadest product lineups in the industry. In this industry steel products are considered commodities, and most steel plants turn out products with comparable quality to other companies. This makes one producer’s reinforcing bar essentially the same as another producer’s reinforcing bar, which in turn makes a particular grade of sheet steel made at one plant almost identical to the same grade of sheet steel made from another plant (C-195). Because of this, steel producers are forced to be price-competitive with the market price of each individual steel product being driven by demand-supply conditions...
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...A Project Report on “WORKING CAPITAL MANAGEMENT” In SUJANA METAL PRODUCTS LTD. Hyderabad. Submitted in partial fulfillment of the Requirements for the award of the degree of MASTER OF BUSINESS ADMINISTRATION BY SUMAN NEELI Under the Guidance of Mr. K. SATISH Asst. Manager (F & M) [pic] DEPARTMENT OF MANAGEMENT STUDIES INDIAN INSTITUTE OF PLANNING MANAGEMENT BANJARAHILLS, HYDERABAD. 2010 – 2012 INDIAN INSTITUTE OF PLANNING MANAGEMENT BANJARAHILLS, HYDERABAD. DEPARTMENT OF MANAGEMENT STUDIES [pic] CERTIFICATE This is to certify that the project titled WORKING CAPITAL MANAGEMENT is being submitted by SUMAN NEELI partial fulfillment for the award of the degree of MASTER OF BUSINESS ADMINISTRATION (MBA) is record bonafide work carried by him. The results embodied in this report have not been submitted to any other university for the award of any degree. ACKNOWLEDGEMENT With immense pleasure and deep sense of gratitude, I express my indebtedness to my project guide Mr. K. SATISH for giving good guidance and keen interest in the progress of the work. I am also thankful to Laxmi Prasanna (Accounts & Finance Department) SUJANA METAL PRODUCT LTD in Hyderabad for giving me permission to undertake the study in the Organization and he providing required sources for completion of my project. I am thankful to …………. I am also express my great sense of gratitude to my beloved parents and my friends who...
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...Tata - Corus –A case of Acquisition Submitted To: Dr.R.Sahu By : Jitesh Maharwal(2004 IPG 29 ) Nikhil Garg(2004 IPG 44) Harendra Singh(2004 IPG 83) Sunny Tyagi(2004 IPG 83) Contents TATA & CORUS: A Case of Acquisition .......................................................................... 3 Steel Industry Background .............................................................................................. 6 Tata and Indian Steel Industry ........................................................................................ 9 SWOT Analysis: ....................................................................................................... 11 Global Steel Industry .................................................................................................... 12 Competition: US, Europe and Emerging Markets ........................................................ 12 Corus and Steel Production in the U.K ......................................................................... 13 Restoring Success ..................................................................................................... 14 SWOT Analysis: ....................................................................................................... 14 The Deal ........................................................................................................................ 16 Structuring and Pricing a deal .............................................................................
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...Major Change from 1865-1914 One major economic change between 1865 and 1914 was the rapid economic growth and prosperity in the U.S. which became to have the most dominant economic, industrial, and agricultural power during this time. The United States had accumulation of capital through a continuing series of investment that just soared dramatically. This economic soar was a turning point for American History and a relief for those who did not have jobs, it was an opportunity for those who did not have job to finally be able seek a better living and a decent job. Robert Higgs, a graduate student wrote a book of the American Economy during 1865-1914. In Robert Higgs book “The Transformation of the American Economy,” he states, “The Gilded Age, lasting from 1865 to World War I, was an era of economic growth never before seen in the history of the world. The standard of living of the modern age was born during this time of phenomenal transition. Lives lengthen. Wealth exploded. The middle class lived better than kings a century earlier” (Transformation of The American Economy). This statement in the book clearly speaks for itself. The economy during this time era was a tremendous upscale in history. The significance of the economic growth during this time meant no more living with the worry of not having a job or having to migrate from city to city just to find a job. This time period brought many people the chance to live a better life and with better pay so to say. Many companies...
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...Part-A: - Executive Summary: 1. Project background & promoters 1.1 PROJECT AT GLANCE 6 MVA * 1 Sub merged Arc Furnace for Manufacture of Ferro Manganese, Silico Manganese SHARANYA NATURAL RESOURCES & INFRA PROJECTS PRIVATE LIMITED H NO 1-2-110 Shanthi Nagar, Adilabad Andhra Pradesh 1. Sri Sanjay Kumar Makhariya 2. Sri P Shankar 3. Smt P Uma Adilabad, Andhra Pradesh Ferro Alloys - Silico Manganese (SiMn.) / Ferro Manganese (FeMn.) Used in Steel Industry 6*1 MVA Furnace Sub merged Arc Furnace for Ferro Manganese, Silico Manganese (4800 TPA SiMn and 7000 TPA FeMn based on equal utilization for both the products) Rs. 1792.33 Lakhs (Say 1792 lakhs) 60% 85% 90% Rs.868.00 lakhs Existing Proposed Term Loan – NIL Rs. 925.00 Lacs CC Limit – NIL Rs. 403.00 Lacs LC/FLC -NIL Rs. 50.00 Lacs One (1) Year Moratorium from Commercial production + 6 Years – Total Seven (7) years from Commercial production Name of the Company Registered Office Names of the Board of Directors Plant location Product Application Installed capacity Project Cost Capacity utilization of Year 2013-14 Year 2014-15 Year 2015-16 & onwards Promoter’s Contribution Banking limit - Term loan - Cash credit - LC/FLC Repayment Period Debt-Equity Ratio Project total (overall) TERM Loan (only) 1.53 : 1 1.07 : 1 3.49 times 5.05 times 40.51% Average DSCR - Gross - Net IRR SHARANYA NATURAL RESOURCES & INFRA PROJECTS PRIVATE LIMITED H NO 1-2-110 Shanthi Nagar, Adilabad Andhra Pradesh Page 1 of 76 1.2. ABOUT...
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