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INDUSTRIAL INTERNSHIP PROJECT

REPORT
On

THE DISTRIBUTION CHANNEL

For

HINDALCO INDUSTRIES LIMITED

Towards partial fulfillment of

Post Graduate Diploma in Management (PGDM)


(2 years Post Graduation Programme approved by AICTE, MHRD, GOI)

Under the Guidance of Under the Supervision of


Mr.M.C.Mahapatra Ms. Shalini Raj
(Sales Manager) (Senior Lecturer)
Submitted By
RAVI PRAKASH MAURYA
Roll no.2008101052
Academic Year 2008-2009

Faculty of PGDM
Babu Banarasi Das
National Institute of Technology &
Management
Sector I, Dr. Akhilesh Das Nagar, Faizabad Road, Lucknow (U.P.) India

Babu Banarasi Das

National Institute of Technology &


Management

LUCKNOW (U. P.) INDIA

CERTIFICATE

This is to certify that Industrial Internship Report


entitled

Distribution channel of Hindalco Industries Ltd.

submitted by

Ravi prakash maurya

Towards the partial fulfillment of the degree of


Post Graduate Diploma in Management (PGDM)
( 2 Years’ Post Graduate Programme duly approved by
AICTE, MHRD, GoI )

in the Academic Year 2009-10


is a record of the student’s own work carried out
at
Hindalco Industries Ltd.

Ms Shalini Raj Dr. Vishal Jain Prof.


A. K. Mittra
Senior Lecturer Dean
Director
ACKNOWLEDGEMENT
I am happy and want to give regard to those person with whom I have learned and
accomplished my present task I am very grateful for those person who have given
essential contribution for completing my project as well as which is need for beginning to
my carrier

With the great pleasure as well as great regard .I want to express hardly to
Mr.S.K.DAS (Manager Training &development center) who has given the chance for
doing summer training in sales department of “HINDALCO INDUSTRIES LIMITED”,
RENUKOOT.

I would also like to give regard to Mr. M.C.Mahapatra, Mr.Rahul Paliwal


&Mr.Bhagwan jee Pandey who has given me timely instruction and provided suitable
path with suggestion which was useful for completing my project.

I will always remember there contribution for leading me all possible co-
operation.
PREFACE

I have covered my project report under the “DISTRIBUTION CHANNEL” which is of


HINDALCO, EXTRUSIONS, which is first truly “MNC” of INDIA.

This report has been written in response to comprehensive study conduced on


the “DISTRIBUTION CHANNEL” OF “HINDALCO INDISTRIES LIMITED”. This
report mentions and evaluated the various aspect, pertaining to the distribution channel of
the company.

I am confident that any one who goes through the report will learn how much be
I learn & benefited during this summer training period.

Ravi prakash maurya


(PGDM) 3rd sem
B.B.D.N.I.T.M
(Lucknow)
TABLE OF CONTENT

 Introduction
 Company Profile
 Aims & Objectives
 Specific Information Of The Organization
 Objectives Of The Study
 Research Methodology
 Problems & Limitations
 Findings, Analysis & Interpretation
 Swot Analysis
 Suggestions / Recommendations
 Conclusion
 Questionnaire
 Bibliography
INTRODUCTION OF HINDALCO

Hindalco Industries Limited, the metals flagship company of the Aditya Birla Group, is
an industry leader in aluminium and copper. A metals powerhouse with a consolidated
turnover in excess of US$ 14 billion, Hindalco is the world's largest aluminium rolling
company and one of the biggest producers of primary aluminium in Asia. Its copper
smelter is the world's largest custom smelter at a single location.

Established in 1958, Hindalco commissioned its aluminium facility


at Renukoot in Eastern U.P. in 1962. Acquisitions and mergers with
Indal, Birla Copper and the Nifty and Mt.Gordon copper mines in
Australia, strengthened the company's position in value-added
alumina, aluminium and copper products, with vertical integration
through access to captive copper concentrates.

In 2007, the acquisition of Novelis Inc. a world leader in aluminium rolling and can
recycling, marked a significant milestone in the history of the aluminium industry in
India. With Novelis under its fold, Hindalco ranks among the global top five aluminium
majors, as an integrated producer with low cost alumina and aluminium facilities
combined with high-end rolling capabilities and a global footprint in 12 countries outside
India

Technology
Cast House technology at Hindalco-Almex Aerospace Limited (HAAL) is based on
Almex's proprietary CASTRIGHT IITM casting methodology and LARSTM, in-line
aluminium purification system.

CASTRIGHT IITM is a premium accuracy billet and ingot casting machine utilising PLC
programme operation, while LARSTM operation is based on the proven principle of high-
energy diffusion and chemically-driven mass transfer. LARSTM has over 75 per cent
degassing efficiency and over 99 per cent inclusion removal efficiency.

HAAL will also be equipped with a R&D cast house for alloy development work. Small
production runs of 1 tonne per casting will be undertaken at this facility. Aluminium
lithium alloys will also be cast here.

This facility will be a scaled down version of a full fledged cast house. Development
work for new chemical compositions for several aerospace applications will be
undertaken at this facility.
Financial information
The company has annual sales of $ 5 billion and employs 13,675 people and is listed on
Forbes 2000. A metals powerhouse with a turnover of US$ 14 billion, Hindalco is the
world's largest aluminium rolling company and one of the biggest producers of primary
aluminium in Asia. On February 11, 2007, the company entered into an agreement to
acquire the Canadian company Novelis for U$6 billion, making the combined entity the
world's largest rolled-aluminium producer. On May 15, 2007, the acquisition was
completed with Novelis shareholders receiving $44.93 per outstanding share of common
stock.

Hindalco, through its wholly-owned subsidiary AV Metals Inc., acquired 75,415,536


common shares of Novelis, representing 100 percent of the issued and outstanding
common shares. Immediately after closing, AV Metals Inc. transferred the common
shares of Novelis to its wholly-owned subsidiary AV Aluminum Inc.

On February 11, 2007, the company entered into an agreement to acquire the Canadian
company Novelis for U$6 billion, making the combined entity the world's largest rolled-
aluminium producer. On May 15, 2007, the acquisition was completed with Novelis
shareholders receiving $44.93 per outstanding share of common stock.

Hindalco, through its wholly-owned subsidiary AV Metals Inc., acquired 75,415,536


common shares of Novelis, representing 100 percent of the issued and outstanding
common shares. Immediately after closing, AV Metals Inc. transferred the common
shares of Novelis to its wholly-owned subsidiary AV Aluminum Inc.
INDUSTRY OVERVIEW
PROFILE OF ALUMINIUM INDUSTRY;
The aluminium industries are highly concentrated, with just five plants accounting for the
entire production capacity of 7, 02,000 tones per annum. The capacity and production
figure for these producers are given below.

Company capacity (lac tones) production (lac tones) capacity utilization (%)
Company Capacity Production Capacity utilization
(lac tones) (lac tones) (%)
BALCO 1.00 0.96 96
HINDALCO 2.42 2.49 103
INDAL 1.17 0.44 37.18
MALCO 0.25 0.02 0.06
NALCO 2.18 2.13 97.56
TOTAL 7.02 6.03 85.92

(Figures pertaining to the year (1999-2000)

The per capita consumption of aluminium in India is only 0.5kg.as against 25kg in USA,
19kg in JAPAN and 10kg in EUROPE. Even the world’s average per capital
consumption about 10 times of that in India. One reason of low consumption in the
country could be that consumption pattern of aluminium in India is vastly different from
that of developed countries.
The demand of aluminium is expected to grow about 9% per annum from present
consumption levels. This sector is going through a consolidation phase and existing
producers are in process of enhancing their production capacity so that demand supply
gap expected in future is bridged. However, in India is a net exported of alumina and
aluminium metal at present.

SAILENT FEATURES OF ALUMINIUM INDUSTRY;

 Highly concentrated industry in the country.


 Controlled by two private groups and one public sector unit.
 Bayer-half-herald.
 Technology used by all producers.
 Electricity, Coal and Furnance oil are primary energy inputs.
 All plants have their own captive power units for cheaper and uninterrupted
power supply.
 Energy cost is 40% of manufacturing cost for metal and 30% for rolled products.
QUANTITATIVE DETAILS;
A-RAW MATERIAL & PRODUCT TYPE;
Bauxite and claimed petroleum cock are primary raw material for this industry.
However aluminium is raw materials for smelters and aluminium metal is raw material
for fabrication units.

B-FUEL USAGE;
Coal, Furnance oil and electricity are primary energy inputs in aluminium
production. Coal is primary used to generate steam. This is used in process while fuel oil
is mainly used in calcinations of aluminum and various furnance in fabrication plants.
Electricity is the major energy input in aluminium production and it considered to be
prime factor in determining economics of aluminium production. Hence all primary
metals producers have installed their own captive power plants to supply cheaper and
uninterrupted power for their use. Majority of electricity consumed in this industry is
supplied their own captive power plants.
C-TECHNOLOGY STATUS;
Invented over 100 years ago, Buyer-Half-Harold is the only available commercial
technology, even today for the production of aluminium metal through electrolytic
process. The production of alumina obtained from bauxite, a mineral containing up to
60% in the form of mono/cryohydrate is carried out through the buyer route, which is an
extractive hydro-metallurgical process.
GROUP OVERVIEW

A US $29.2 billion corporation, The Aditya Birla Group is in the league of fortune 500. It
is anchored by an extraordinary force of 1, 30,000 employees, belonging to 30 different
nationalities. In India the group has been adjudged “The best employed in India and
among the top 20 in Asia, “By the Hawitt-Economic Times and well street journal study
2007. Over 50% of its revenues flow from its overseas operations.
The group operates in 25 countries –INDIA, U.K, GERMANY, HUNGARY,
BRAZIL, ITALY, FRANCE, LUXEMBOURG, SWITZERLAND, AUSTRALIA,
U.S.A, CANADA, EGYPT, CHINA, THAILAND, LAOS, INDONESIA,
PHILIPPINES, DUBAI, SINGAPORE, MYAMMAR, BANGLADESH, VIETNAM,
MALAYSIA, and KOREA.

Globally the Aditya Birla Group is;-


 A metal powerhouse among the world’s most cost-efficient aluminum and
copper producers. Hindalco-Novelis is the largest aluminum rolling company.
It is one of the three biggest producers of primary aluminum in Asia, with the
largest single location copper smelter.
 No.1 in Viscose staple fibre.
 The 11th largest cement producer globally, the seventh largest in Asia and the
second largest in India.
 Among the world’s top 15 BPO companies and among India’s top four.
 Among the best energy efficient fertilizer plants.

In India, The groups hold a frontrunner position as;


 A premier branded garments player.
 The second largest player in viscose filament yarn.
 The second largest in the chlor-altali sector.
 Among the top five mobile telephony companies.
 A leading played in life insurance and asset management.
 Among the top three supermarket chains in the retail business.
Rock solid in fundamentals’ The Aditya Birla Group nurtures a culture where success
does not come in the way of the need to keep learning a fresh to keep experimenting.
BEYOND BUSINESS—THE ADITYA BIRLA
GROUP IS;
 Working in 3700 village.
 Reaching out to seven million people annually through The Aditya Birla
Centre.
 Running in 41 schools and 18 hospitals.
 Focusing on, health care, education, sustainable livelihood infrastructure and
espousing social causes.
Company Profile
THE SAGA OF RENUKOOT
HINDALCO Industries Ltd., one of the major producers of Primary Aluminium Metal
and Semis in the country, is the biggest industrial enterprise of Uttar Pradesh. It is a
public limited company in the private sector having about 39000 share holders. It is the
largest integrated aluminium plant in India with all its production facilities viz. alumina,
aluminium and fabrication located at Renukoot near Rihand Dam in Sonbhadra (U.P.).
Hindalco Power Division is situated at Renusagar about 35 Kms. from Renukoot. In
September 1959, an Industrial License was granted by the Government for setting up an
integrated aluminium plant at Renukoot,
with an initial installed capacity of 20,000 M.T. The construction work was completed
within 18 months, a record for a major job of this kind. The dream of the great visionary
Syt. G.D. Birla to locate an aluminium plant near Rihand Power House came true. The
Late Prime Minister Pt. Jawaharlal Nehru formally inaugurated the plant in January 1963.
Going round the extensive works, Panditji saw his dream of a brighter future of India take
shape before his eyes. From the modest beginning in 1962, Hindalco has now become an
industrial giant with a capacity to produce 2,42,000 tones of aluminium per annum.
Renukoot, a fast growing and thriving industrial township, which is one humming with
activities, and providing all the basics amenities of modern life to the inhabitants, was
once a wild and desolate jungle infested by animals. From being one of the most
backward areas of U.P.. it has carved a place for itself on the industrial map of India and
the world. Lying in the foothills of the Vindhya range, Renukoot is about 160 Kms. from
Varanasi and 154 Kms. from Mirzapur. There is a direct train between Amritsar to
Tatanagar and Ranchi via Renukoot. This apart Renukoot is also connected with Calcutta
by train, directly. Facing the giant man-made biggest artificial lake Govind Ballabh Pant
Sagar, Renukoot is a picturesque township unscarred by the ravages of industrialisation.

EXPANSION AND MODERNISATION


Hindalco is India's largest Aluminium producer with a Primary Aluminium Smelting
capacity of 242,000 MTPA. The company's integrated operations include Power
Generation Capacity of 612 MW and a 450,000 MTPA Alumina Refinery. Hindalco's
semi fabrication facilities comprise of Rolled products 80,000 MTPA, Redraw Rods
40,000 MTPA and Extrusions 13,700 MTPA.
The company has opted for induction of the most modern technology and has undertaken
comprehensive modernisation over the past years. It includes commissioning of two Gas
Suspension Claciners, three high efficiency PF/Fluidised Bed Boilers with co-generation
facility and Micro Processors based Pot Control System. The Rodding Room facilities
have also been modernised. In the semi-fabrication, a state-of-the-art Vertical Billet
Casting and Slab Casting facility have been installed. A new Rolling Mill has been
commissioned and the existing Mills have undergone a comprehensive modernisation.
Hindalco has also installed a Roll Former, a Cut to Length Line, a Rewind Line and
Tension Leveler in Rolling Mills.

Hindalco's products are well accepted in the domestic as well as international markets.
The company's metal is accepted for delivery under the High Grade Primary Aluminium
Contract on the London Metal Exchange. The Company's export efforts have led to
recognition as a 'Star Trading House'. Hindalco is an ISO 9002 Company and has also
received ISO 14001 Certification for its entire operations including Power Plant and
Mines. As a part of its diversification programme, a 5,000 MTPA Aluminium Foil Plant
and an Aluminium Alloy Wheel Plant of 300,000 w.p.a. capacity has been set up at
Silvassa.
BROWNFIELD EXPANSION
To further augment its presence in the aluminium sector, Hindalco has initiated work on a
brown field expansion at Renukoot. The expansion will increase Smelting capacity by
100,000 MTPA to 342,000 MTPA. Aluminium refining capacity will be raised by
210,000 MTPA to 660,000 MTPA. Power Generation capacity will augmented by 150
MW to 769 MW.

ACQUISITION OF INDAL
Hindalco has also acquired aluminium major - INDAL. Hindalco's holding in INDAL
now stands at 74.62%. India strength in Aluminium and downstream aluminium products
admirably dovetails Hindalco's unmatched presence in metal and collectively commands
the highest meal capacity in the entire South East region.

MISCELLANEOUS INFORMATION
In 1962 when production started, the Company had on its roll about 900 staff and
workmen and the present strength of employees is about 14000. The Principal Office and
Works is located at Renukoot and there are Zonal Sales Offices at Bangalore, Mumbai,
Delhi, and Calcutta. The Company is managed by a Board of Directors and other senior
executives.
Financial information
The company has annual sales of $ 5 billion and employs 13,675 people and is listed on
Forbes 2000. A metals powerhouse with a turnover of US$ 14 billion, Hindalco is the
world's largest aluminium rolling company and one of the biggest producers of primary
aluminium in Asia. On February 11, 2007, the company entered into an agreement to
acquire the Canadian company Novelis for U$6 billion, making the combined entity the
world's largest rolled-aluminium producer. On May 15, 2007, the acquisition was
completed with Novelis shareholders receiving $44.93 per outstanding share of common
stock.

Hindalco, through its wholly-owned subsidiary AV Metals Inc., acquired 75,415,536


common shares of Novelis, representing 100 percent of the issued and outstanding
common shares. Immediately after closing, AV Metals Inc. transferred the common
shares of Novelis to its wholly-owned subsidiary AV Aluminum Inc.

On February 11, 2007, the company entered into an agreement to acquire the Canadian
company Novelis for U$6 billion, making the combined entity the world's largest rolled-
aluminium producer. On May 15, 2007, the acquisition was completed with Novelis
shareholders receiving $44.93 per outstanding share of common stock.

Hindalco, through its wholly-owned subsidiary AV Metals Inc., acquired 75,415,536


common shares of Novelis, representing 100 percent of the issued and outstanding
common shares. Immediately after closing, AV Metals Inc. transferred the common
shares of Novelis to its wholly-owned subsidiary AV Aluminum Inc.
Aims & Objectives

Company’s Mission
"TO PURSUE THE CREATION OF VALUE FOR OUR CUSTOMERS, SHARE
HOLDERS, EMPLOYEES AND SOCIETY AT LARGE"

Company’s Vision
"TO STRENGTHEN OUR POSITION AS A PREMIUM ALUMINUM COMPANY,
SUSTAINING DOMESTIC LEADERSHIP AND GLOBAL COMPETITIVENESS
THROUGH INNOVATION, QUALITY AND VALUE ADDED GROWTH"
Company’s Moto
To be a premium metals major, global in size and rich, with passion for excellence. To
relentlessly pursue creation of superior shareholder value by exceeding customer
expectation profitably, unleashing employee potential and being a responsible corporate
citizen adhering to our value.
 Integrity- Honesty in every action
 Commitment-Doing whatever it takes to deliver, as promised
 Passion-Missionary zeal arising out of an emotional engagement with work
 Seamlessness-Thinking &Working together across functional silos hierarchy
levels, business and geographies
 Speed-Responding to stakeholders with a sense of urgency

SPECIFIC INFORMATION OF THE


ORGANISATION
 The world largest company aluminium rolling company.
 World leader in viscose staple fiber.
 Fastest growing copper company in Asia.
 The Aditya Birla Group is the 11th largest cement producer in the world.
 Fourth largest producer of carbon black in the world.
 One of the biggest producers of primary aluminium in Asia.
 One of the lowest cost producers of aluminium in the world.
 ISO 9001:2000 and 14001 certified.

FACTFILE

Market capitalisation of Rs. 202599 million as of 31 March 2008

335,337 equity shareholders as of 31 March 2008

Over 82 per cent of shares are in dematerialised form


134,723,182 outstanding GDRs as of 31 March 2008

Dividend of 185 per cent ( i.e Rs. 1.85 per share) on the paid-up equity
share capital as of 31 March 2008

EPS of Rs. 24.51

ECS facility available for dividends

Transfer-cum-demat facility

Nifty and Mount Gordon copper mines in Australia

Aditya Birla Minerals Limited (Hindalco subsidiary) first Indian


company to be listed in Australia

Milestones
2007 Successful acquisition of Novelis, making Hindalco the largest in aluminium
rolling and among the global top five metals majors, with a presence in 11
countries outside India.

Acquisition of Alcan's 45 per cent equity stake in the Utkal Alumina project,
thereby making Hindalco the 100 per cent project owner.
2006 Hindalco announces 10:1 stock split. Each share with face value of Rs. 10 per
share split into 10 shares of Re 1 each.
Hindalco completes largest Rights issue in the history of Indian capital markets
with total size of Rs. 22,266 million.

Equity offering and subsequent listing of Aditya Birla Minerals Ltd. on


Australian Stock Exchange.

Signed an MoU with the Government of Madhya Pradesh for a greenfield


aluminium smelter in the Siddhi district of the state.

Joint venture with Almex USA for manufacture of high strength aluminium
alloys for applications in aerospace, sporting goods and surface transport
industries.
2005 All businesses of Indal, except for the Kollur Foil Plant in Andhra Pradesh,
merged with Hindalco Industries Limited.

MoUs signed with state governments of Orissa and Jharkhand for setting up
greenfield alumina refining, smelting and power plants.

Commissioned Copper III expansion, taking total capacity to 500,000 tpa.


2004 Copper smelter expansion to 250,000 tpa.
2003 Hindalco acquires Nifty Copper Mine in March 2003 through Aditya Birla
Minerals Ltd. (ABML, formerly Birla Minerals Resources Pty. Ltd.).

ABML acquires the Mount Gordon copper mines in November 2003.

Equity stake in Indal increased to 96.5 per cent through an open offer.

Brownfield expansion of aluminium smelter at Renukoot to 345,000 tpa.


2002 The amalgamation of Indo Gulf Corporation Limited’s copper business, Birla
Copper, with Hindalco with effect from 1st April 2002.
2000 Acquisition of controlling stake in Indian Aluminium Company Limited (Indal)
with 74.6 per cent equity holding.
1999 Aluminium alloy wheels production commenced at Silvassa.

Brownfield expansion of metal capacity at Renukoot to 242,000 tpa.


1998 Foil plant at Silvassa goes on stream.

Hindalco attains ISO 14001 EMS certification.


1995 Mr. Kumar Mangalam Birla takes over as Chairman of Indal Board.
1991 Beginning of major expansion programme.
1967 Commissioning of Renusagar power plant – a strategic and farsighted move.
1965 Downstream capacities commissioned (rolling and extrusion mills at Renukoot)
1962 Commencement of production at Renukoot (Uttar Pradesh) with an initial
capacity of 20,000 mtpa of aluminium metal and 40,000 mtpa of alumina.
1958 Incorporation of Hindalco Industries Limited.

Hindalco's businesses

Hindalco in India enjoys a leadership position in aluminium and copper. The company's
aluminium units across the country encompass the entire gamut of operations from
bauxite mining, alumina refining, aluminium smelting to downstream rolling, extrusions,
foils and alloy wheels, along with captive
power plants and coal mines. The Birla Copper unit produces copper cathodes,
continuous cast copper rods along with other by-products, including gold, silver and DAP
fertilisers. >>

Aluminium

Hindalco was among the first few alloy wheels companies to have obtained the ISO/TS
16949 certification to meet the stringent standard of the automobile industry. In India,
Hindalco enjoys a leadership position in speciality aluminas, primary aluminium and
downstream products. Apart from being a dominant player in the domestic market,
Hindalco's products are well accepted in international markets. Exports account for more
than 30 per cent of total sales.

Hindalco's major products include standard and speciality grade aluminas and hydrates,
aluminium ingots, billets, wire rods, flat rolled products, extrusions, foil and alloy wheels
>>

Copper
Birla Copper, a unit of Hindalco is located at Dahej in Gujarat. The unit has the unique
distinction of being the largest copper smelter in the world at a single location with
500,000 tpa capacity with multiple world class technologies. The facilities comprise
copper smelters, precious metals, fertilizers, sulfuric acid, captive power plants, utilities
and a captive jetty.

Hindalco's Birla Copper is a renowned producer of copper cathodes and continuous cast
copper rods since its inception, with ISO-9001:2000 (Quality Management systems),
ISO-14001:2004 (Environmental Management System) OHSAS-18001:2007
(Occupational Health and Safety Management Systems) accreditations

Production capacities
Division Capacity and location
Alumina 700,000 tpa (Renukoot)
350,000 tpa (Belgaum)
180,000 tpa (Muri)
Aluminium 375,000 tpa (Renukoot)
143,000 tpa (Hirakud)
Extrusions 33,000tpa (Renukoot)
13,000 tpa (Alupuram)
Flat rolled products 100,000 tpa (Renukoot)
57,000 tpa (Belur)
50,000 tpa (Taloja)
30,000 tpa (Mouda)
Redraw rods 75,000 tpa (Renukoot)
Foil and packing 30,000 tpa (Silvassa)
6,000 tpa (Kalwa)
4,000 tpa (Kollur)
Wheels 300,000 pcs (Silvassa)
Captive power 742 mw (Renusagar)
78 mw (Renukoot)
368 mw (Hirakud)
Copper cathodes 500,000 tpa (Dahej)
Continuous cast copper rods 120,000 tpa (Dahej)
Sulphuric acid 1,470,000 tpa (Dahej)
Phosphoric acid 180,000 tpa (Dahej)
DAP and complexes 400,000 tpa (Dahej)
Gold 26 mt (Dahej)
Silver 200 mt (Dahej)
Power 135 mw (Dahej)
Copper
India's leading copper producer
India's largest copper smelting and refining plant at Dahej, Gujarat,
with two copper mines in Australia
Smelting and refining capacity 500,000 tpa, the largest single location smelter in
the world
Captive jetty (Dahej Harbour & Infrastructure Limited, a wholly owned
subsidiary)
ISO 9001,14001 and OSHAS 18001 certified
Registered on London Metal Exchange as Grade A Copper Brand

PROFIT & LOSS ACCOUNTS


(Rs crore) FY 07 FY 06 FY 05 FY 04 FY 03
Income
12,476 10,48
Gross sales and operating revenues 19,920.1 6,819.9 5,502,4
.4 0.3
1,079 95
Less: excise duty 1,607.1 611.5 516.7
.9 7.2
11,39 9,52
Net sales and operating revenues 18,313.0 6,208.4 4,985.7
6.5 3.1
243 27
Other income 370.0 240.0 218.3
.9 0.1
18,683.0 11,640.4 9,793.2 6,448. 5,204.
4 0
Expenditure
(1,033
(Increase) / decrease in stocks (442.5) (255.6) (101.9) (23.7)
.8)
Raw material consumed and goods 2,323.
11,078.3 6,603.3 4,639.4 3,100.9
purchased 6
Payments to and provision for 462.
519.6 411.6 237.1 222.9
employees 8
Other operating expenses 3,142.6 2,759.1 2,451.2 1,472.0 1,217.8
Interest and finance charges 242.4 225.2 170.0 177.2 136.5
Depreciation and impairment 638.0 521.1 463.3 317.5 264.2
5,202. 4,141.
15,178.4 9,537.7 7,879.9
8 3
Profit before extraordinary items
3,504.6 2,102.7 1,913.3 1,245.6 1,062.7
and tax
Extraordinary items - (3.0) 9.1 - 163.3
1,245. 899.
Profit before tax 3,504.6 2,105.7 1,904.2
6 4
32 57
Provision for current tax 984.1 260.6 252.0
4.1 0.5
Provision for deferred tax (55.1) 115.9 75.9 146.1 65.3
Fringe benefit tax 11.3 10.1 - - -
Provision for deferred tax for earlier
- - (71.6) - -
years written back
838. 582.
Net profit 2,564.3 1,655.6 1,329.4
9 1

AWARDS

Hindalco has been active on many fronts, and takes its role as a socially responsible
corporate house very seriously. The company has won a number of awards for
community welfare and environment protection, as well as for its quality and export
performance

Year
2008 | 2007
2008
:: Greentech Safety Gold Award 2008 for outstanding achievement in safety
management in coal based power eector.
:: Hindalco Hirakud Systems ranked runners up at the state level IT Competition 2008
organised by CII in association with the department of informational technology,
Government of Orissa.
:: Hirakud smelter was awarded the state level safety award for Best Occupational
Healthcare 2006 — presented in February 2008 at Bhubaneswar.
:: Talabira coal mines won a host of safety awards, namely, first in working face and
maintenance of Dozer & Payloader and second in dust suppression at the Annual Coal
Mines Safety Fortnight 2008 organised by Directorate of Mines Safety, Bhubaneswar
and Chaibasa region.

2007
:: The Golden Peacock Award 2007 by the World Environment Foundation for its
remarkable achievements in occupational health & safety.
:: The Safety Innovation Award 2007 for excellence in the field of occupational health,
presented by The Institute of Engineers India.
:: The National Energy Conservation Award 2007, second prize, awarded by the
Ministry of Power and Energy, Government of India.
:: Renukoot was selected for the Rajiv Gandhi National Quality Award 2007 – Silver
Trophy, presented by the Bureau of Indian Standards, in the large scale manufacturing
(metallurgy) category.
:: The CII National Award for Excellence in Water Management (Beyond the Fence)
2007, for its land and water management projects in neighbouring villages.
:: The IMC Ramkrishna Bajaj National Quality Award 2007 – special award for
excellent performance in the service category.
:: The CII Human Resource Excellence Award 2007 for strong commitment and
significant achievement in the field of HR.
:: The “Greentech Environment Excellence Silver Award 2007” by the Greentech
Foundation.
:: Renusagar’s quality circle teams “VAYUDOOT” and “NAVODAYA” achieved the
Par Excellence Quality Circle Award at the National Level Convention NCQC 2007.
:: Hirakud smelter - National Energy Conservation Award — first prize 2007.
:: Hirakud smelter - National Safety Award for performance year 2005 (presented in
Oct 07) by Ministry of Labour and Employment, Government of India.
:: Hirakud power - CII - Orissa Award for Best Practices in Environment, Safety,
Health for the year 2007.
:: Hirakud power plant’s ‘Jeevan Jyoti’ and ‘Aryan’ quality circles won the
Distinguished Award at the National Convention of Quality Circles – 2007. Other
Hirakud power teams, bagged awards at the regional and state level QC competitions.
:: Hirakud power plant’s “Shakti” and “Prerana” quality circles also bagged third prize
in the operations & production category and repair & maintenance category
respectively during the seventh Supervisor Skills Competition organised by CII in
December 2007.
:: Muri alumina plant selected for CII’s National Award for Excellence in Water
Management 2007 for both Within and Beyond the Fence 2007.
:: Belur was selected for the National Safety Award for outstanding performance in
industrial safety as runners up for the performance year 2005 in achieving the lowest
average frequency rate (presented in October 2007), by the Ministry for Labour and
Employment, Government of India .
:: Winner of the GreenTech Environmental Gold Award in the metals and mining sector
for its outstanding achievement in environment management during 2007 - 2008.
:: Earned the National award as an "Energy Efficient Unit", presented by CII.
:: Belur sheet plant was adjudged the winner of the "CII – Eastern Region Energy
Conservation Award for 2007 – 2008".
:: Alupuram complex awarded the Outstanding Safety Performance Award 2007 in the
small scale engineering industrial category, presented by the National Safety Council,
Kerala chapter.
:: Taloja sheet plant was presented the Metallics Systems USA — Maintenance Award
for best operation & maintenance of molten metal pump at its recycling plant.
:: Hindalco awarded the CII-Sorabji Green Business Centre "National Award for
Excellence in Water Management 2007".
:: Hindalco won the prestigious “D.L. Shah National Award for Economics of Quality”
given by quality council of India. Chief manufacturing officer, Mr. R. P. Shah and
Mr. Arun Kumar received the award from the President of India, H.E. Dr. A.P.J.
Abdul Kalam on 9 February 2007 at New Delhi.

DISTRIBUTION CHANNEL

CONCEPTUAL FRAMEWORK;
A set of interdependent organizations involved in the process of making a product
available, or reached the target market or consumers.
Smooth a availability of our products to the right customers, at a right place, at a right
time with safe & secured quality and quantity is an important task for the customers
satisfaction or goals of an organization. Organizations are spending a huge amount about
25 to 35% of the cost of products.
Most producers do not sell their goods directly to the final users stands a marketing
channel, a host of marketing intermediaries performing a variety of names.
Thus, “A channel of distribution for a product may be define as a route taken by the
title to the goods as they move ultimate customers or industrial users.”
Definition According to A.W. Shaw, “Application of motion to materials as they
move from the times, places, forms and conditions where they have value.”
Definition According to Philip Kotler, “Marketing channels can be viewed as sets
of interdependent organizations involved in the process of making product or services
available for views or consumption.

ROLES AND FUNCTIONS OF


DISTRIBUTION CHANNEL;
Distribution channel play a very important role in achieving the marketing objectives of a
company. Undoubtedly value utility is created by manufacture of product or services but
time and place utilities are created by distribution channels. The distribution system
creates a value added to almost all products.
The value added in distribution in the case of several consumer articles is significant
as compared to the value added during manufacture.

The role and emergence of distribution channel may be explained in the following
terms;
1- PRINCIPLE OF MINIMUM TOTAL
TRANSACTION;
Distribution channel and the intermediaries comprising them arise in the process
of exchange because they increase efficiency of the process. This thesis is based on the
premise that a decentralized system of exchange with manufacturers directly interact with
consumers isles efficient relative to centralized network employing intermediaries. It is so
because in order to involve transaction each contact between the manufacturers and the
consumers adds to the total cost of distribution.

2-DISCREPANCY OF ASSORTMENT AND


SORTING;
In addition to increasing the efficiency of transaction intermediaries also smooth
out the flow of products and services by creating possession, time and place utilities.
These utilities enhance the value of consumers assortment. This smoothening process is
carried out owing to the performance of sorting function by intermediaries. This process
bridges the discrepancy between the assortments of goods offered and the one demanded
by consumers.

3-ROUTINISATION;
The cost of transaction can also be minimized if the transaction are routines, made
a matter of routine, in respect of product valuation, mode of timing of payment, other
wise every transaction could be subject matter of bargaining with resultant loss of
efficiency.

4-SEACHING;
In market, both sellers & buyers respectively look for appropriate buyers and sellers
with products approximately to the buyers needs. Thus, both are engaged in search
process. But it also involves uncertainty. Distribution channels greatly facilitate this
search process, when intermediaries specialize in terms of products and services by
bringing both the parties at one point.

5-THE PRINCIPLE OF MASSED RESERVES;


This principle indicates that inventories of products are required to be held at
practically all points in distribution channel. Since the final buying units are numerically
much greater, the total quantity of goods in storage at any time would be much greater in
the absence of intermediaries.
IMPORTANCE OF DISTRIBUTION CHANNEL
In any developing company there is an increasing emphasis on specialization and the
division of labour as a result of this “GAP” gets developed between producer and users.
The primary purpose of distributive channel is to bridge this gap by resolving spatial
(geographical distance) and temporal (relating to time) discrepancies, certain essential
functions need to performed.
These areas;
1) Transfer of title to the goods involved.
2) Physical movement from the point of production to the point of consumption.
3) Storage function.
4) Communication of information concerning the availability characteristics and
price of the goods in transit, inventory and on purchase.
5) Marketing creates various utilities to the products. Most of these utilities are, in
fact, created by performing the function of physical distribution promptly and
efficiently.

The importance of these functions varies depending upon the nature of the goods them
selves. For example, transportation and storage tend to predominate in the case of bulky
raw material such as coal, petroleum products and iron ore, where price and specification
are standardized and the market comprises a limited number of buyers and sellers. As the
complexity of the product increase, the provision of information and product service
becomes predominate;

For example, computer, automobiles, etc. therefore it is necessary the prices nature of the
product and the seller-buyer relation ship to determine their relative importance.

A distribution channel represents three types of flows;-

• Product flow downwards from product to consumers.


• Cash flows upwards from consumer to producer.
• Marketing information flows both ways.

Choice of distribution channel is very important decision due to the following reasons;
1) Distribution channel is an important element of the marketing mix of a
firm; other elements are closely interrelated with and interdependent on
the channel of distribution. There fore choice influences other marketing
decision like pricing, promotion and physical distribution. A mistake in
the choice of channel may affect adversely the whole marketing mix of
the firms.
2) The cost involved in the use of distribution channels enter the price of the
products that the ultimate consumer has to pay. Due a wrong decision
regarding, channel, distribution cost may be very high and sales might be
very limited. On the other hand, sound channel decisions enable the firm
to cut down costs and maximize sales revenue. Thus, channel influences
sales volume and profits.

3) A product or service is really useful to consumers only when it is


available at the right time and place. The channel decision determines
where and when the product will be available to ultimate consumers or
users.
4) Choice of marketing channel involves long term commitment of the firm.
The relation between the manufacturer and the middleman depend largly
upon the choice of appropriate channels of distribution, change in the
channels of very difficult and costly.
In the choice of channel is proper, fluctuations in production can be reducing due to
continuous and effective distribution. The stability of production will help to ensure
steady employment and proper budgetary control. The manufacture can continuously
monitor the sales and stock of his middleman to exercise effective control over
distribution network

CONTRIBUTION OF CHANNEL
• Make available on time.
• Reduce the cost of distribution.
• Save the distribution time.
• Helpful in product design & development.
• Flow of feedback from customer.
• Flow of money consumers to manufacturer.

VARIOUS TYPE OF CHANNEL LEVELS;


While a marketers want to sell or marketing about the products & services, requirement
of design a distribution channel to make product & services available to customers in
different ways, In the process of distribution of products, Each layer of marketing
intermediaries are perform some work in bringing the product and its ownership closer to
the final buyer is a channel level.

Generally two methods of distribution are in the practices;

1-DIRECT MARKETING CHANNEL


2-INDIRECT MARKETING CHANNEL

1-DIRECT MARKETING CHANNEL;


Direct marketing channel that has no intermediary levels manufacture or sellers are
advertise their product through the various method of advertising & make awareness
about the products then contact to the needful customers through their salesmen, internet,
e-mail, telephone or by post etc

MANUFACTURERS

CUSTOMERS

2-INDIRECT MARKETING CHANNEL;


Indirect marketing channel is channel containing one or more intermediary levels.
Manufacturers or sellers are appointed various type of marketing intermediaries in the
context of nature.

TYPES OF CHANNEL MEMBERS;


• C &F AGENTS;
It means clearing and forwarding agents. They are responsible for storage and
transportation of the company’s products. And its

Distributor and some time retailers.

• DISTRIBUTORS;
A distributor is usually appointed by the company and does not sell its competitors
products. He can also be a distributor of many products of the some company, Retail
stores. The distributor is very much an extension of the company as he ensures that the
market is property served. A company has direct control over the distributors.

• WHOLESALERS;
Some of the following type of wholesalers;

 MERCHANT WHOLESALERS;

 Purchase and resell merchandise.


 He has title to merchandise.
 He provides wide range of services.

 FULL SERVICE WHOLESALERS;

 Perform full range of distribution services.


 Provide trade credit, offer promotion assistance, personal sale force and
communication of information.
 Provide installation and services.

 RACK JOBBER;

 Deals with highly promoted items.


 Furnishes rack and shelves, price the goods; keep them fresh, setup point
of purchase display.
 Sell on consignment.
 Provide services as delivery, shelving, and inventors caring.

 LINUTED FUNCTIONS WHOLESALE;


Not provide credit, marketing research information and merchant dishing assistance.

• MERCHANDISING AGENTS & BROKERS;


They usually perform fewer services than merchant wholesalers do. Merchandising
agents and brokers do not take title to product but negotiate sales for manufacture, they
represent.

 MANUFACTURER’S AGENTS;

 They are free to work for several manufacturers.


 They carry non-competitive complementary products in exclusive
territories.
 They do not provide credit facility but at times store and deliver
products.
 Also provide research aid and promotion support

 BROKERS;

 To bring buyer and seller together.


 To assist in negotiation.
 They have not title to goods.
 But they provide the facility of financing.

• COMMISSION MERCHANTS;
 Received goods on consignment.
 They have not title to goods.
 To accumulate them from local markets and arrange for their sales.
 Offer credit and storage goods facility.
 To provide sales force and research aid.
 They do not normally promote the goods.

SALES FACILITIES;
MANUFACTURER’S SALES FACILITIS;

 Established by manufacturer.
 It is separate from manufacturing operations.
 It’s performing the wholesaling function himself.
 Generally used in industrial customers.
TYPES OF MANUFACTURER’S SALES
FACILITIES;
 MANUFACTURER’S SALES BRANCHES;

 Carry inventory.
 Promote the sales activities.
 Sell to retail outlets.

 MANUFACTURER’S OFFICE (REGIONAL SALES OFFICES);

 It does not carry inventory.


 Perform market research, demand forecasting etc.
 Collect orders from customers.
 Make delivery to customers from manufacturing point.
 Collection of payments.
 Dispose all the disputes or claims.

CHANNEL SELECTION FRAMEWORK


CHANNEL SELECTION PROCESS;
 EVALUATION OF THE DISTRIBUTION ENVIRONMENT;
Selection of channel model has to be necessarily taking into account
the distribution environment obtaining in the country region and in the
specific business in which the firm engaged.
A has to evaluate the vital feature of the distribution environment
and ensures that the channel model to be adopted is compatible with them.
Distribution environment in the border sense includes the legal
environment as well in so far as its implications and distribution are
concerned.

 EVALUATION OF COMPETITOR’S CHANNEL PATTERNS;

The firm should also study the competitors channel patterns before
deciding its channel while the firm may not necessary follow the competitors
it will be worthwhile for the firm to analyse in depth the plus and minus of the
channel patterns adopted by each of the major competitors.

 EVALUATION OF COMPANY RESOURCES AND MATCHING


THE CHANNEL TO THE RESOURCES;

On the other hand firm with larger resources and large size
marketing operation will be in a position to go in for highly intensive
distribution committing a good deal of resources to the distribution task.

 IDENTIFICATION OF ALTERNATIVES CHNNEL & SELECTION


OF THE ONE THAT SUITS THE FIRM;

Two important considerations are cost and efficiency. Often


though not necessarily they are directly proportional. The channel that it’s
efficient but relatively less expensive has to be chosen. Two types of
evaluation an economic evaluation may be necessary. The firm should also
examine whether the channel member in the desire alternatives would be
willing to work enthusiastically for the firm and the product.

 ANALYSING THE PRODUCT CHARACTERISTICS AND


LINKING CHANNEL TO THE PRODUCT;

The firm should analyse the characteristics of the product and


choose the channel designee that is most suited to the product. Within each of
these broad categories of product channel choice can very in relation
to specific products/product types. The products features, after all changes in a
graded manner as on move though the spectrum from the simplest consumer
soft to the most complex among industrial equipment.
NOTES:
 Consumer products Vs industrial products.
 The case of industrial products.
 The products most have a sizable customer base.
 It most be standardized to a reasonable extent.
 It must be stock able items.
 The unit value should not be too high.
 It should not be complex.
OBJECTIVES OF THE STUDY

The primary objective of channel of distribution to bridge the gap by resolving spatial
(geographical distance) and temporal (relating to time) discrepancies as to supply and
demand.

 Making smooth availability of product to the target market.


 Achievement of the best possible coverage of the target market.
 Ensuring that the consumer incurs the minimum extensuation in procuring the
product.
 Ensuring that the distribution is cost effective.
 Safe in quality and accuracy in quantity.
 Quick services.
 Ensuring that the firm is able to carry on with its manufacturing activities,
confident that the channel will take care of the distribution job.
MARKET SEGMENTATION OF
HINDALCO

The market for aluminium products in India is very widespread;


• Geographically
• By Diversified of end user.
Further, there are a large number of small and medium consumers and a few large
consumers. The smallest consumers would be consuming as little as IMT/Month,
However, the largest number of Hindalco’s customers are in the consumption range of 5-
50 mts/ month.
Aluminium is begin used in around 3000 products in developed countries like USA,
JAPAN, CANADA, etc. Where in India, only around 350 products find use in aluminium
moreover, the per capita consumption of aluminium in the country is very low (1.1
kg/year).
Hence, there is large potential for introducing the new users and the increasing the
consumption. As a strategy therefore, Hindalco decide to cater to as many consumer as
possible. Their distribution system therefore, is designed to the object.
Hindalco manufacture the products with very specification as desired by the
various customers, Hidalco’s market may be segmented in the following manner;
[A]- MARKET SEGMENTATION BASED ON
THE PRODUCT GROUP;
On the basis of product group, Hindalco’s market may be segmented in the following
user,

PRIMARY PRODUCTS’
• Ingots
• Wire Rods
• Billets

R0LLED PRODUCTS;
• Sheet
• Chequered Sheet
• Roofing Sheet
• Coil
• Hot Rolling Plates
• Circles

EXTRUDED PRODUCTS
• General solid Section
• Tubings
• Structure Of
• Architecture Of
• Mouldings

FOIL
• Cable Wrap Stock
• Light Gauge Foil
• Bare And Coated Fine Stock
• Collapsible Insulation Duets

ALLOY WHEELS [“AURA”]


• 12” To 18 Diameters

[B]- MARKET SEGMENTATION ON THE


BASIS OF PRODUCT WISE KEE
CONSUMER;
PRIMARY PRODUCTS; [CONSUMERS]
• Value added aluminium.
• Sheet producer industries.
• Foil producer industries.
• Electrical equipments.
• Automobile industries.
• Ferrow alloy.
• Smelter pot lining

ROLLED PRODUCTS; [CONSUMERS]


• Foil and packing industries (box, cop & sustainer).
• Electrical industries (bulbs, tube lights, fan blade ect).
• Transportation industries.
• Buildings & Construction sector-roofing flooring etc.
• Transportation sectors.
• Consumers durable flooring and roofing
• General Engineering pilper-proof bottle cops, pressure cookers, nonstick
cookers.

EXTRUDED PRODUCTS; [CONSUMERS]


• Automobile industries
• Building and construction sector
• Mines and defence sector
• Transportation sector
• Electrical sector
• Architectural sectors
• Furniture sector
• Households consumer durable

FOIL; [CONSUMERS]
• Packing sector (Printed multi laminated)
• Pharmaceuticals
• Diary products
• Processed food
• Personal care products
• Cigarettes
• Con-Factionary
• Box ropping
• Air conditioner
• Automobile radiator
• Collapsible insulation duets
ALLOY WHEELS; [CONSUMERS]
• Automobile sectors
• Maruti Suzuki
• Tata motors
• FLAT India
• Hindustan motors
• Telco
• Ford India
• Hyundai India
• GM India etc

C-MARKET SEGMENTATION BASED ON


THE DEMAND PATTERN;
Based on size & frequency of order, Hindalco market maybe segmented as follows;

• BULK CUSTOMER;

Bulk customer are those customer whose demand is very high and consistence some
of the bulk customers are Howkins, TTK, Foil division Silwassa, Jugraj, Tagraj,
Bajaj, Auto, etc.

• SMALL & MEDIUM;

Small and medium customers may be bracketed as those customers whose demand is
comparatively low and not so consistence, some of the small customers of Hindalco
included ITI Allahabad Defence Organization, Dockyard etc.

D-MARKET SEGMENTATION ON THE


PRIORITY;
On the basis of priority given to various orders Hindalco market may be segmented
in the following manner.

• ROUTINE CUSTOMER;

Routine customers are those customers, who are regularly sourcing the company.
Their orders are processed in the normal course of working.

• SPECIAL CUSTOMERS;

Special customers are those customers, whose orders are for products under
development. Since their demand is usually regent in nature they are given priority
under routine customers,

Examples; Exports customers, government organization like, defense,


Establishment etc. continue this category.

E-MARKET SEGMENTATION BASED ON


CONSUMPTION SECTOR;
Uses of Aluminium metal are everywhere, it is not may in categorize in some
particular heads. However, we categorize in the following major sectors;
• Electrical
• Transportations
• Building& constructions.
• Packing.
• Consumers durable.
• Others.

F-MARKET SEGMENTATION BASED ON


GEOGRAPHICAL ARE;
Aluminium consumers are spread all over the country. Different are have different
type of industries, whose are used aluminium in different quantity. Here segment the
market in geographical areas based on consumption or demand pattern.

G-TRANSPORTATION FACILITY;
Smooth transportation facility is available all over the country all the time. Some
areas are affected by flood; some areas are block in the case of heavy rain etc.

DISTRIBUTION PROCESS AT
HINDALCO

There are different task involved in distribution process as follows;


• ORDER PROCESSING
• PACKING & INSURANCE, BANKING, BILLS
• WEREHOUSING
• TRANSPORTATION
• GODOWN SALES PROCEDURE

ORDER PROCESSING;
Every purchaser has to book his order giving details such as plain sheet, cold rolled coil,
milk can sheet, and circle etc. Purchaser should be fully disclosed such as product name,
quality, quantity, technical data, mode of transportation, desire delivery time, payment
mode etc.
Technical wing of Hindalco examines there applications and if necessary also make
inspection of the facing and decided quality to be offered. There after, a term of payment
is finalized and the order is finally booked. This order is then passed to the relevant
personnel’s officials with relevant details.

PRIORITY;
A priority list of all categories consumers has to be fixed in consultation with the
concerned. Consumer gets delivery in order to their priority, which is also followed by
transporting agents.

ORDER PROCESSING;
Hindalco procure order either directly from the customer or through the agent/stockiest.
The order contains the name of product, quality, size, clearance etc.
After the receipt of order from the customers or agents, the company scrutinizes the
order. A production planning program is prepared for rolled product on monthly basis.
This monthly report is sent to the respective production department. The produced
materials are then sent to the inspection and packing department.

WAREHOUSING;
Every people have to store the goods while they wait to be sold. A strong function is
necessary production and consumption cycles rarely match. Warehousing is the
responsibility of warehouse incharge in Hindalco the work start when warehouse
officially receive finished goods from production. Hindalco warehousing incharge
dispatch the materials to respective customers on advice of CSMO and follows the
guidelines given to them.

PACKAGING;
No vertical stocking of package. After loading truck, it should be covered with tarpaulin
during storage;
• Out doors storage should be avoided.
• Do not store packages directly on the floor, use wooden pallets?
• Check condition of metal every few hours to ensure no water condensation.
• If possible, forced hot air circulation inside godown desired.

MODE OF LOADING;
Mode of loading is the part of distribution system. There are two types of loading;
• Manual loading.
• Automated loading

Now a days every where the automated loading system is used because it is time
arising and also very economical than manual loading. In Hindalco, there is good
system of loading i.e., automated loading system. They also used some manual
labours for small products.

TRANSPORTATION;
In distribution system without proper mode of transportation, the product can not be
reached to the market at times as a result of which the in company faces failure. In
Hindalco the products are transported only by road. The rail mode is only used to
bring the raw materials, which is used to produce aluminium in the industry. By
observing the mode it can be said that 100% of the products of Hindalco industries
are transported by road.

SALE OF MATERIAL;
They make a contract with a potential customer for sell of product. After receiving the
order they prepare an invoice of the material sold. They obtain payment from
customer/negotiation the documents as pre mutually agreed tern on the basis of
payment/negotiation of documents. They deliver order in favour of the party.

DELIVERY OF MATERIAL;
They deliver the material as per the delivery order. Then they note down the delivered
materials in the godown resister. Then they send the delivery report daily to zonal office.

INSURANCE;
Every material is dispatched duly insured. They are two types of insurance;
1-CARRIER RISK
2-OWNER RISK

Hindalco arrange insurance facility for the customers. If are any danger in transportation
they will issue damage certificate and the customer can claim its insurance on the basis of
damage certificate.
GODOWN SALIS PROCEDURE;
Godown sales procedure describes the sales procedure of Hindalco product
through its godown. The respective zonal head exercise control over all activities related
to the godown sales. This procedure is followed by all the godown of company situated at
Delhi, Faridabad, Chandigarh, Jaipur, Haryana, Banglore, Hyderabad and Kolkata.

ADVANTAGE OF THE PRODUCT


ADVANTAGE;
Physically, chemically and mechanically aluminium is a metal like steel, brass,
copper, zinc, lead or titanium. If it can be metal cost, formed and machined much like
these metals and it conducts electric current. In fact often the same equipment and
fabrication method are used as for steel.

LIGHT WEIGHT;
Aluminium is a very light metal with a specific weight of 2.7g/cm, about a third that of
steel. For example, the use of aluminium in vehicles reduces dead-weight and energy
consumption while increasing load capacity. Its strength can be adopted to the application
required by modifying the composition of its alloys.

CORROSION RESISTANCE;
Aluminium naturally generates a protective oxide coating and is highly corrosion
resistance. Different types of surface treatment such as anodizing, painting, or lacquering
can further improve this property. It is particularly useful for application where protection
and conservation are required.
ELECTRICAL & THERMAL CONDUCTIVITY;
Aluminium is an excellent heat and electricity conductor and in relation to its weight is
almost twice as good as conductor as copper. This has made aluminium most commonly
used material in major power transmission lines.

REFLECTIVITY;
Aluminium is good reflector of visible light as well as heat that together with its low
weight, makes its an ideal material for reflectors in. For example, light fittings or
resources blankets.

DUCTILITY;
Aluminium is ductile and has a low melting point and density. In a molten condition it
can be processed a number of ways. Its ductility allows products of aluminium to be
basically formed close to the end of this product design.

IMPERMEABLE AND ODOURLESS;


Aluminium foil, even when it is rolled to only 0.007mm thickness, Is steel completely
impermeable and let’s neither light aroma nor taste substances out. More over, the metal
it self is non-toxic and releases no aroma taste substances which make it ideal for
packaging sensitive products such as food or pharmaceuticals.

RECYCLABILITY;
Aluminium is 100% recyclable with no down grindings of its qualities. The re-melting of
aluminium requires little energy, only about 5% of energy required to produce the
primary metal initially is related in the recycling process.
BRIEF HISTORY OF
ALUMINIUM;
Earth contains about 8% aluminium metal compared to 5% FE clay having greater
aluminium compounds provides better longer serving utencils made from clay.

VARIOUS SCIENTIST TRIED TO SEPARATE OUT ALUMINA;

1809 LEVISOR He named it Aluminium by checking


Properties of its oxide.

1825 He Oersted He was successful in


obtaining clay metal
reducing AlCl3 with
Kamalgam

1845 Wholer He made it and checked


Its properties Light, Ductile,
Stable, Low m.p.

1855 Aluminium bars were


exhibited next to crowns
Paris exihibition and public
Got a chance to see alumini-
-um it’s metal form.
Bauxite derived its name from Less Baux village of France where it was found for first
time.

ALLUMINIUM PROPERTIES

The major advantages of using aluminium are tide directly to its remarkable properties.
Some of these properties are outlines in the following sections.

• STRENGTH TO WEIGHT RATIO;


Aluminium has a density around one third that of steel and is used advantageously in
application where high strength and low weight are required. This include vehicles where
low mass result in greater lode capacity reduction fuel consumption.

• CORROSION RESISTANCE;
When the surface of aluminum metal is exposed to air, a protective oxide coating forms
almost instantaneously. This oxide layer is corrosion, resistant and can be further
enhanced with surface treatment such as anodizing.

• ELECTRICAL & THERMAL


CONDUCTIVITY;
Aluminium is an excellent conductor of both heat & electricity. The great advantage of
aluminium is that by weight, the conductivity of aluminium is around twice that of
copper. This means that aluminium is now the most commonly used material in large
power transmission lines including domestic wiring.

• WEIGHT CONSIDERATION;
It means that a large property of overhead, high voltage power lines now used aluminium
rather than copper.

• LIGHT AND HEAT REFLECTIVITY;


Aluminium is a good reflector of both visible light & heat marketing, it an ideal material
for light fitting, thermal rescue blankets and architectural insulation.

• TOXICITY;
Aluminium is not only non-toxic but also does not release any odors or taint

Product with which it is in contact. This makes aluminium suitable for use in packing for
sensitive products such as food or pharmaceutical where aluminium foil is used.

• RECYCLABILITY;
The recyclability of aluminium is unparalleled. When recycled, there is no digression in
properties when recycled aluminium is compared to virgin aluminium. Further more,
recycline of aluminium only required around 5% of the input energy required to product
virgin aluminium metal.
APPLICATION OF ALUMINIUM;
1- IN CONSUMER DURABLES;

Consumer durable good include kitchen utensils domestic electrical application. One of
the earliest applications of aluminium was in the manufacturing of kitchen utensils,
notably saucepans.

The properties which makes aluminium suitable for use in consumer durable product
include its good thermal conductivity, its lightness of weight, its resistance to corrosion,
the brightness of its appearance and the case of fabricating it, aluminium is use in
components for many domestic electrical application such as cookers, refrigerators etc.
Major applications are also in following fields;

 Cookers
 Refrigerators
 Freezers
 Vacuum cleaners
 Washing machines
 Ice tray & grid
 Paddles
 Stove tops
 Water filters
 Furniture
 Hangers
 Letters plates
 Solar channel
 Watch case etc.

2- IN ELECTRICAL INDUSTRY;
Annealed commercial grade Aluminium with purity of 99.7% aluminium has an electrical
conductivity 63.5% that of cooper, but it has must lower density than copper.
Aluminium has been used for overhead transmission of high voltage electricity,
aluminium is resistant to corrosion. It is almost universally used for high voltage bare
overhead conductors and in some instance it is also used for the transmission tower they.
Aluminium is almost suitable where space is not restricted and insulation is n0t
required high voltage overhead transmission lines are usually not insulated so the higher
cost of insulating larger conductor avoided.
Because of cheaper than copper aluminium is widely used in bare overhead
conductors.
Major applications are also in following electrical fields;
 Electrical components
 Accessories
 Motor body
 Cable core
 Telephone parts
 Transmission tower.

3-IN CONSTRUCTION INDUSTRIES;


Aluminium &Aluminium alloys have a number of properties, which make them ideal for
use in building and construction industries. These properties include light weight
combined with high strength, good resistant to corrosion, visual attractiveness
without the need for painting, low maintenance and handling cost and in the case of
structural, materials, reduces building time and cost as the materials are easier to handle,
and involve the use of lighter, cheaper eranes and other materials handling equipment.
Aluminium is used in the both the structure and fitting of residential and non residential
building.

The main use are roofing and cladding and in window & doorframes, but there are many
other uses, some are as follows;-
 Solar panels
 Cladding roofing
 Window door & general application
 Architectural hardware furniture
 Grills
 Ventilation blind
 Foil insulating
 Capping strip rain water guttering
 Shower boxes
 Mosquito nets
 Casemate window
 Ceiling system
 Roller shutter

4-IN PACKING INDUSTRIES;


An aluminium metal can is used in a variety of products packing. Use of aluminium
metal cans, include industrial products and consumer durable products, such as milk &
milk products, fresh fishes, soft drink etc. Innovation of aluminium foil has also a
silent future in packing the products. Foil can be used as a
Household or commercial wrapping, either alone or in commercial wrapping, in the
form of laminates with their materials. Foil containers are widely used for the packing
of good, especially frozen food. Foil layers are important in paper based packing such
as cartons for fruit juice, wine boxes have foil containers inside them, which collapd as
the contests are drawn off and prevent the ingrees of air, which of air which oxidizes
and spoil the remaining contents.
Foil is used as on oxygen-tight seal in the packing of dry powders like coffee and
foil seals are also under development to provide temper-proof seal for pharmaceuticals.
Many pharmaceuticals in tablets from are contained in foil packages, which permit
individual tablets to be removed without opening the others up to the air.

Major applications in the field are as follows;

 Pharmaceutical packing
 Cigarettes foil
 Tea industries
 Tagged lids
 Aluminium cans for milk
 Dairy product packing
 Multiply laminates
 Electrical power application
 Decorative laminates
 Collapsible tube
 Powder and chemicals
 Colors
 Aseptic packing
 Beverage cans
 Flexible food packing
 Semi-rigid containers

5- IN RAILWAYS;
The high strength to weight ratio of aluminium alloys makes them highly suitable for use
in Railway rolling stock, in which they reduce the tare weight to permit fuel saving and
the carriage of increase the payloads. Aluminium alloys are also resistant to corrosion,
which leads to saving in maintenance, and increase the service life of railway vehicles.
The types of railways vehicles for which aluminium alloys are suitable include mainline,
locomotives passenger carriages and freight wagons.
Aluminium alloys are also being considered for use in the magnetically levied trains,
which have been introduced in some cities in recent years. ALCON, ALCO,
ALUSUISSE, KAISER and REYNOLDS have all developed lightweight aluminium coal
cars. These advantages of fuel economy an increased speed on return journey when the
train runs empty.

Aluminium alloys are widely used in rolling stock for this type of railway operation,
because their lightness of weight permits faster acceleration and reduces breaking both of
which are important in trains, which are required to provide the shortest possible journey
time despite the need to make many intermediate stops. Sometimes at intervals of only a
few hundred meters.

Aluminium car is 30% more expansive, but one third lighter than its steel counters
part. Its payload is around 10% higher and fuel consumption is significantly reduced.
Aluminium is widely used in the best known higher speed passenger trains are used in
FRANCE; the TGV makes extensive use of aluminium.

Major applications are as following;


 Wagons
 Doors
 Windows
 Decorative frames, etc
e.g. METRO TRAIN in India.

6- IN TRANSPORT INDUSTRY;
Aluminium alloys are used in the construction of almost all type of transport
equipment. The most widely publicized application for aluminium is in aircraft, through
this in one of the smelter application in term of the tonnage consume. the largest end use
in the road vehicle, both passenger’s can & commercial
vehicle, and it is also used in railway rolling stock and in the construction of naval and
merchant ships and small boats.
The largest outlet for aluminium amongst road vehicle is in passenger cars,
which though smaller than commercial vehicle are built in very large numbers such as:
• Aeroplane
• Commercial aircraft
• Passenger cars
• Bus and bus shelter
• Railway
• Bicycles & bikes
• Trucks
• Light motor vehicles.

APPLICTION OF ALUMINIUM IN TRANSPORT SECTOR:

Europe country 29% of


Japan 30% consumption US
28% Canada
28%
Australia 25%
India 16%

7- IN AUTOMOTIVE INDUSTRY;
The use of aluminium in construction of passenger cars is new. In the UK the
ROVER Company has made intensive of aluminium in body work for over 40 years,
starting with the LAD ROVER 1948 than notably in the
ROVE 75 and ROVER 90 series (1949-1964) and ROVER 2000. All the models of
vehicle concerned, where by the standards of the times during which they were build, low
volume models. Aluminium is still more widely used in low volume, high performance,
highly prices models of automobiles then in the high volume production models, which
account for most of the passenger or produce.
The consumption of aluminium, light weight materials in the manufacturers of
passenger can is governed by consideration of safety of fuel efficiency, in emission
control and cost.
Aluminium is used for a wide range of components. A variety of examples are
available to show the range of components, which have been produced from aluminium.
Currently the European cars consume 70 Kg of aluminium compared to 120 Kg use in the
US markets. In India, the use of aluminium in passenger’s cars stands on an average at 20
Kg in comparison to 35-35 Kg witnessed in other developing countries.
Today the per capita consumption of aluminium in automotive sectors accounts for
22% of total per capita consumption of aluminium in India. Globally the sector holds
25% of the total consumption; Examples of parts being converted from other traditional
materials to aluminium include, but are not limited to the following:
• Wheels
• Hoods
• Deck lids
• Bumper beams
• Suspension parts
• Break discs
• Break drum and other break components
• Radiators
• Cylinder heads & blocks
• Steering housing
• Chryner design engines
Doorframes, sills, steps, roof bows, ride parts

PRIMARY ALUMINIUM PRODUCTION


CONSUMPTION BY MAJOR
COUNTRIES IN 2005

COUNTRY PRODUCTION (KT) CONSUMPTION (KT)


Norway 1376 246
Brazil 1499 759
Australia 1903 380
Canada 2894 803
USA 2480 6143
Russia 3647 946
China 7806 7119

PER CAPITA CONSUMPTION OF ALUMINIUM;


COUNTRY CONSUMPTION (kg/person)
Japan 32.0
USA 31.9
Germany 31.6
Canada 31.2
Italy 29.5
France 21.4
Australia 21.2
UK 15.0
China 6.5
Brazil 4.1
India 1.1

MAJOR ALUMINIUM PRODUCER


INDUSTRIES IN INDIA
COMPNY OWNERSHIP LOCATION CAPACITY (tpa)
Hindalco A B Group Renukoot 375000
Alpuram 14000
Hirakund 143000
Belgaum 31000

NALCO Public sector Angul 345000


BALCO Sterlight Korba 350000
Sterlight Mettur 40000

EXTRUCTION CAPACITY, PRODUCTION &DEMANND 1991-2020 (MT)

PARTICULARS 91-92 99-00 03-04 2010


Capacity 122000 190000 202000 202000
Production 61000 109000 132000 188000
Domestic 60000 105000 117000 166000
demand
Export Nil 4000 15000 22000
Excess capacity 62000 81000 70000 14000
RESEARCH METHODOLOGY

SAMPLING PLAN;
There is no sampling plan as such as the study involved in understanding the various
processes and analyzing them. The study involved in the detailed analysis of secondary
data calculated from sources and there fore no sample size and plan has been considered.

RESEARCH DESIGN;
This project is based on two researches-
 Exploratory research design
 Conclusive research design
SOURCES OF DATA;
Data has been collected through literature survey and expert opinion. The part of data is
collected from various primary sources and secondary sources.

PRIMARY SOURCES;
Information’s gathered through interview and discussing with departmental member.

PERSONEL INTERVIEW;
EMPLOYEES;

Mr.M.C.Mahapatra (Sales Manager)


Mr.Rahul Paliwal (Asst.Sales Manager)
Mr.Kamal Panwar (Purchase Department)
Mr.R.K.Tondan (Sales Executive)

DISTRIBUTORS;

Mr.Baccha Singh (Renukoot)


Mr.Raju Ram (Shaktinagar)

SECONDARY DATA;

 Annual report of HINDALCO,2007-08 and individual contra sheet of Aluminum


and copper for the 2007-08
 Internet
 Induction guide
PROBLEMS & LIMITATION
 The company is situated so for from the Airport.

 causes of huge demand the company has to do work 24 hours.

 There is no facility of shippying because it is situated at hill.

 Transformation can be stooped the working activity of company.

 The raw materials are available in other states .coal, baxite.


FINDING

Through its study, many points related to the Indian aluminium industry and aluminium
extrusion came forward. These points are as follows;

 The Indian aluminium industries primary aluminium production is around more


than 8 lakes tons per annum by 2010 and 2 millions tons by 2015. Aluminium
extrusion market size is around 88,000 tons per annum and it will cross 1 lake
tons per annum by 2010.
 Hindalco is having 52% share in primary aluminium production and 36% share in
aluminium extrusion market.
 There are 3000 aluminium application world wide but in India only 10% of them
are there. In India maximum consumption of extrusion is in electrical industry
(18%) & building construction industry (16%)
 Aluminium is used instead of steel or other heavy metals due to its better
corrosion strength to weight ratio, good machine-ability and lower maintenance
cost.
 Steel is used at a large scale in India. It is heavily used in building and
construction rail road transportation and etc. the light weight steel alloys the steel
are major competitors of aluminium. Other competing elements are Magnesium,
Titanium and Thermoplastic.
The major constraint is applying more aluminium applications its cost. The aluminium is
3-4 times more expensive than steel and in India cost of production is very important
factor.

SWOT ANALYSIS
STRENGTH

 Global brand image.


 Cost effective product.
 Sound financial position
 A high degree quality consciousness is the core competence of the company;
ISO9001 and ISO14001 have added more prestige to the company.
 Integrated production facilities at Renusagar power plant.
 Company has a well established distribution network, covering a geographically
wide scattered market.
 A number of Brownfield and Greenfield projects.
 Industrial peace as, there has been no major strike in last 22 year.
 A well focused human resources development.
 Serves maximum customer satisfaction.

WEAKNESS;
 Present production capacity is not adequate to meet the rising high demand.
 Technology is not upgraded compare to global giants in aluminum industry.

OPPORTUNITY;

 R&D collaboration with universities and other organization.


 More emphasis on down stream production of value added products.
 Recycling should be adopted as routine production.
 Raising more finance for more merger & acquisition for consolidating position in
the global market.
 Aluminum continues to be strong with a growth in transportation sector 16%,
construction 15%, passenger’s car 25% and two heeler segments 14%
respectively during FY’07.

THREATS;

 Strong domestic and global competitors, such as TATA, PASCO, MITTLE,


ESSAR, BALCO, NALCO etc.
 Innovative revaluation in plastic and steel industry.
 Reduce in exude duty.
 Fall in price of aluminum in neighbouring countries.

SUGGESTION/RECOMMENDATION/CON
CLUSION
Certain recommendations with regard to distribution channel of HIL are as under;
A; Northern zone offers the most lucatative in last financial year. In the last of such high
sales driven by the factors such as heavy investment in infrastructure and related
industries-machinery, transportation etc. In this zone our more than 65% sales depend on
direct sales. So that our focus should convert indirect sales to direct sales. Our effort
should be here increase the depots in proportionate way, and also made appointment
TM’s and RM’s.

B; Southern zone is also the fast growing market for the company. The zone offers bright
prospects to company in terms of future demand driven by rapid industrial expansion. In
this zone our more than 60% sales depends on direct sales and also we face cutthroat
competition. In maintain the sales need of continuous market research in regard to
distribution channel and appoint stockiest instead of consignment agents.
C; Western zone is the key market of the company. This zone is the most advanced zone
in industrialization in the country. In this zone our 65% (approx) sales is through direct
sales.
Analysis of sales data, present depots, stockiest & consignment agents, 35% of
sales in this zone is indirectly depend upon consignment agents and stockiest. The
demand of this zone is very high. To optimize in this key zone, the company should
established additional depots in that areas. Ahmedabad and Nagpur for enhancing direct
sales.

D; In eastern zone company’s indirect sales is approx 70% such a heavy indirect sales
reflects that the company is not in direct
contact of its customers and their worries and feedback and these are most essential
factors for improving level of sales.

In direct sales is not helpful to create, grow and retain the customers, so making the sales
customers oriented and to improve the sales the company can take the following
initiatives.
1. Assign sales representative to contact all prospects in this area.
2. Design a sales promotion complains focusing on brand awareness.
3. Appoint a regular sales representative with each stockiest.
4. Shift to retail format of business by owning aluminium galleries in malls.

CONCLUSION

The above study makes it clear that HINDALCO has a well-established market for its
products. The company is making a reaped progress in the various spheres of its business
activities besides the company adopts a favorable attitude towards safety environments
and quality consideration. The company has also been undertaking various community
developments programs. In the nearby located areas.
It has been a learning a exercise to complete this project, working on this project I
found the practical knowledge about the industrial organization. It has been an enjoyable
and fruitful experience to me. I certainly gained a lot of practical knowledge while on
training.
The study is intended to be concluded with the help “Strength, Weakness,
Opportuinity, Threats” Analysis of Distribution Channel of the Hindalco Industries
Limited which will presents a summarized view of the whole study.
QUESTIONNAIRE

Which product using;-


PRODUCT QUANTITY BRAND NAME

Are you satisfied with


……………………………………………………………………………………………
……………………………………………………………………………………………
……………………………………………………………………………………………
………

Past program of the product


Price structure
After sales service
Spare parts availability
Lead time
Technically strong sales and service team

Any requirement for any of the product which we produce?


Yes / No If yes then which

Have you heard about our extrusions?


Yes / No If yes then which

Will you prefer the aluminium extrusions to other?


Yes / No If yes then which one

Would you like to know about the ingots, wire-rods, foil etc?
Yes / No If yes then why and when

Clint /Company name …………………………………………


Address …………………………………………………………...

Phone no…………………………………
Contact Person…………………………
Product you manufacture

ANALYSIS OF QUESTIONNER

From the use of the questionnair we got the actual view of the distribution of the products
in market –
In first stage , using the questionnaire we asked about the quantity of the product
that the customers are use and of which brad name .
In second stage , we give some questions to the customers regarding the
performance , price structure after sale service and the availability of the spare parts and
what are the facility that are given by service team and we asked the requirement of the
customers for satisfy them and know about the knowledge about the product they have or
not and the preference of the customers because we can give the shape to the procut
according to the needs of the customers that product are like ignots , wire rods and foils
etc.
At last we find from the analysis of questionnaire that the products of highly used
in the sector of Electric, Railways, Shipping and Aluminium made consumer goods
BIBLIOGRAPHY

MAGIZINES;
 Impex time
 Aluminium times
 Aluminium now
 Aluminium international today
 Annual report (07-08), HIL
 Induction guide

INTERNET;
 Hindalco.com
 Aditya Birla.com
 Google.co.in
 Wikipedia.com

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