National Aluminium Company Limited, India

PROJECT REPORT
ON
MARKETING STRATEGY OF NALCO
Prepared by:

PITABASH BEHERA
Roll No.1410MBA13

Under the guidance of

Mr. J.P DASH
Assistant General Manager (Marketing)
Corporate office
NALCO, Bhubaneswar-751061

P.G DEPARTMENT OF BUSINESS ADMINISTARATION

SAMBALPUR UNIVERSITY, JYOTI VIHAR, BURLA, 768019, ORISSA
Visit us at:[email protected]
17th June 2011

CONTENTS

SLNO TITLE Page no

1 EXECUTIVE SUMMARY 7-7

 2 INTRODUCTION 8-9
3 PROFILE OF ALUMINIUM 10-27
4 PROFILE OF NALCO 28-37
5 REVIEW OF LITERATURE 38-51
6 ANALYSIS AND FINDINGS 52-56
7 DOMESTIC PROCEDURE 57-61
8 TERM & CONDITIONS 62-66
9 PRICING PROCEDURE 67-67
10 DISTRIBUTION PROCEDURE 68-68
11 EXPORT PROCEDURE 69-71
12 CUSTOMER SATISFACTION 72-76
13 PROMOTIONAL PROCEDURE 77-78
14 SUGGESTIONS 78-78
15 CONCLUSION 79-79
16 BIBLOGRAPHY 80-80
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 LIST FO TABLE

Table no TITLE
1 Aluminium Applications
2 Ranking TOP 10 Countries In World With Respect To Aluminium Production
3 Production Of Alumina In India.(Unit In Tones)
4
Ranking TOP 10 companies In World With Respect To Aluminium Production
5 Nalco Capacity
6
Region Wise Sales Structure Of Aluminium
7
Dominant Players Of Aluminium Industry
8 Aluminium Ore Capacity Of Top 10 Countries (In Million Tones)
9 Global Trend Of Aluminium Usage (Consumption):
10 Aluminium Usage Of Western World And India(%)
11 Country Wise Usage Of Aluminium In Different Sector
12 Usage Of Aluminium In India
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 LIST OF FIGURES

SLNO TITLE
1 Bohr Diagram

2 Aluminium Production

3 Entire Bayer Process

4 Alumina-Bauxite Refining

5 Aluminium Sustainability

6 The Marketing Mix

7 BCG Growth-Share Matrix

8 . SWOT Profile

9 . 7s Model

10 BCG Growth-Share Matrix Of Nalco

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 Executive Summary
Aluminum represents the second largest metals market in the world. Growing demand for the
lightweight metal is fuelled largely by the booming Chinese economy which already
consumes a quarter of the world’s aluminium production. Analysts predict an annual growth
rate of 8 to 16% in the Chinese automotive industry up to 2010, a 15% increase
in construction expenditure in 2011 and a minimum of plus 16 million annual growths
in urban population during the next 8 years. According to analysts these factors will combine
to see China consume 36% of world’s aluminium production as early as 2010.

Aluminium Industries in India is one of the leading industries in the Indian economy. The
growth of the aluminum Metal industry in India would be sustained by the diversification and
exploration of new horizons for the industry. India has huge deposits of natural resources in
form of minerals like copper, chromites , iron ore, manganese, bauxite, gold, etc. The India
aluminum industry falls under the category of non iron based which include the production of
copper, tin, brass, lead, zinc, aluminum, and manganese.

The main operations of the of the India aluminum industry is mining of ores, refining of the
ore, casting, alloying, sheet, and rolling into foils. At present, Hindalco and Nalco are one of
the most economical in the production of aluminum in the world. For the sustenance of the
growth the aluminum industry in India has to develop research and development units to
assist the production and improve on the quality measures to keep a stringent quality control.

Marketing strategy is one of the important parts of company’s development. The objective of
this study was to help NALCO to know it’s own position in comparison to it’s competitors; to
know whether the strategy used by the company is effective; and to provide a proactive,
planed & informed approach to it’s own strategies in order to gain an upper hand. The study
on Marketing strategy is done by taking all aspects of strategy very keenly like SWOT, BCG ,
7S MODEL , 4P’s. and others procedures.
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 1.0 Introduction
In the present competitive world every company wants to be the best in their segment of
business. So, company identifies its competitors with whom it has to compete and according
to it the company makes its strategy to survive in the market. If the company cannot compete
in the market then it will become a dog in the market. Now-a-days each and every company is
too aggressive to follow or lead the market. Therefore, it has become imperative to study the
Marketing strategy of the company and renew it time and again.

Coming to the aluminium industry, this is one of the leading industries in the Indian economy.
The growth of the aluminum Metal industry in India would be sustained by the diversification
and exploration of new horizons for the industry. So the proper use of marketing strategy is
very much important and that to in a planed way. Keeping these facts in view this study was
conducted to know the growth of NALCO as well as to find opportunities for expansion of
business and capturing the present market. The analysis of marketing strategy of NALCO was
based on the following parameters: 1) The Marketing Mix (The 4 P's of Marketing); 2) The
BCG Growth-Share Matrix; 3) SWOT Analysis; 4) 7S Framework. And others...

2.0 Objectives of the study

 To help the company to understand its position with respect to its major competitors in
the market, and provide business competitive intelligence.
 To understand the present Marketing strategy deeply so to provide a proactive,
planned and informed approach to its future strategies in order to gain an upper hand.
 To analyze the present product line of the company that how effective they are.
 To find out company’s strengths and weakness and also the threats as well as
opportunities.
 To find out the work style of man power.
 To observe the action of competitors, that might help the company to learn more about
the market.
 To show the company new ways of expanding the business

3.0 The relevance of the topic for the company

Today is the age of competitions so each and every company is aggressive in capturing new
opportunities available to gain market share. If the company is aware of its position respect to
its major competitors in the market, and have business competitive intelligence can act
proactively to gain an upper hand. Also the company should have knowledge about the
effectiveness of their products. Apart from these this study also helps the company to know
its strengths and weakness and also the threats as well as opportunities; its work style of
manpower; its competitors; the procedure of pricing. Domestic procedure, export procedure
and show new ways of expanding the business. These are quite pertinent aspects for the
growth of the company.
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 4.0 Limitations of the Study
The limitations of the study are linked to information gathered from various sources and the
interpretation of the information. Also with the exception of a few information sources like
forecasted financial statements, this is particularly the case if there are a lot of structural
changes happening in the sector and all the players are expected to have dynamic Marketing
strategy to capture their market.
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 5.1 Profile of Aluminium
5.1.1 Background

Aluminum is the third most abundant element of the Earth’s crust, behind that of oxygen and
silicon. Of the metallic elements, it is the most abundant, 7.3% by mass of the total crust. Due
to Aluminum’s high affinity to bind with oxygen, it is not found in naturally occurring in its
elemental state, but only in combined forms such as oxides or silicates.

The ancient Greeks and Romans used aluminium salts as dyeing mordant and as astringents
for dressing wounds; alum is still used as a styptic. The metal originally obtained its name
from the Latin word for alum, alumen. The name alumina was proposed by L. B. G. de
Moravia, in 1761 for the base in alum, which was positively shown in 1787 to be the oxide of
a yet to be discovered metal. Finally, in 1807, Sir Humphrey Davy proposed that this still
unknown metal be referred to as aluminum. This was then altered further to that of aluminium
so to agree with the "ium" spelling that ended most of the elements. This is the spelling that is
generally used throughout the world. That is, until the American Chemical Society in 1925
officially reverted the spelling back to aluminum, which is how it is normally spelled in the
United States.

Though the existence of Aluminum was established by Sir Humphry Davy in 1808, it would
take years upon years of deliberate research to find an efficient method to unlock the metal
from its ore and even more years to create a production process that would allow the metal to
be commercially practical.

Famous British writer Charles Dickens is well know for his sharp social commentary and
well observed wit. Less well know perhaps are Dickens's opinions on aluminium. Over 140
years ago, approximately 30 years before the work of Hall and Héroult, Dickens became very
interested in the discovery of a new metal that he believed would have an outstanding future.
The metal was aluminium, and in 1857 he wrote:

"Within the course of the last two years ... a treasure has been divined, unearthed and
brought to light ... what do you think of a metal as white as silver, as unalterable as gold, as
easily melted as copper, as tough as iron, which is malleable, ductile, and with the singular
quality of being lighter that glass? Such a metal does exist and that in considerable
quantities on the surface of the globe."

"The advantages to be derived from a metal endowed with such qualities are easy to be
understood. Its future place as a raw material in all sorts of industrial applications is
undoubted, and we may expect soon to see it, in some shape or other, in the hands of the
civilized world at large."
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 5.1.2 Time Line

In 1821 P. Bertheir discovers outside a small village in the south of France a clay-like
material that contains 52 per cent aluminium oxide. He gives this ore the name bauxite. He
does not realize it at the time, but he had discovered the most commonly found ore of
aluminium. Four years later in 1825, Has Christian Oersted was able to obtain tiny amounts
of actual aluminium metal through a painstaking process of heating anhydrous aluminum
chloride with potassium amalgam and then distilling away the mercury. The residue that
remained was that of impure aluminum. Between the years of 1827 and 1845, Frederick
Wohler would improve upon this process by substituting potassium for the amalgam and
finding a better method for the dehydration step of the final aluminum product. Wohler also is
credited with establishing the specific gravity, or density, of aluminum, which officially
demonstrated one of the metal’s now most well known qualities, it’s amazing lightness.

5.1.3 Key Dates

1808 Sir Humphry Davy (Britain) established the existence of aluminium and named it.

1821 P. Berthier (France) discovers a hard, reddish, clay-like material containing 52 per cent
aluminium oxide near the village of Les Baux in southern France. He called it bauxite, the
most common ore of aluminium.

1825 Hans Christian Oersted (Denmark) produces minute quantities of aluminium metal by
using dilute potassium amalgam to react with anhydrous aluminium chloride, and distilling
the resulting mercury away to leave a residue of slightly impure aluminium.

1827 Friedrich Wöhler (Germany) describes a process for producing aluminium as a powder
by reacting potassium with anhydrous aluminium chloride.

1845 Wöhler establishes the specific gravity (density) of aluminium, and one of its unique
properties - lightness.

1854 Henri Sainte-Claire Deville (France) improves Wöhler's method to create the first
commercial process. The metal's price, initially higher than that of gold and platinum, drops
by 90% over the following 10 years. The price is still high enough to inhibit its widespread
adoption by industry.

1855 A bar of aluminium, the new precious metal, is exhibited at the Paris Exhibition.

1885 Hamilton Y. Cassner (USA) improves on Deville's process. Annual output 15 tones!
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1886 Two unknown young scientists, Paul Louis Toussaint Héroult (France) and Charles
Martin Hall (USA), working separately and unaware of each other's work, simultaneously
invent a new electrolytic process, the Hall-Héroult process, which is the basis for all
aluminium production today. They discovered that if they dissolved aluminium oxide
(alumina) in a bath of molten cryolite and passed a powerful electric current through it, then
molten aluminium would be deposited at the bottom of the bath.
 P. Héroult. Héroult's Patent. C.M. Hall. Hall's Patent.

5.1.4 Properties of Aluminium

A piece of aluminium metal about 15 centimeters long, with a U.S. cent included for scale.
Aluminium is a soft and lightweight metal with a dull silvery appearance, due to a thin layer
of oxidation that forms quickly when it is exposed to air. Aluminium is nontoxic (as the
metal), non-magnetic, and non-sparking. Pure aluminium has a tensile strength of about 49
megapascals (MPa) and 400 MPa if it is formed into an alloy.

Aluminium is about one-third as dense as steel or copper; is malleable, ductile, and easily
machined and cast; and has excellent corrosion resistance and durability due to the protective
oxide layer. Aluminium mirror finish has the highest reflectance of any metal in the 200-400
nm (UV) , and the 3000-10000 nm (far IR) regions, while in the 400-700 nm visible range it
is slightly outdone by silver, and in the 700-3000 (near IR) by silver, gold and copper. It is
the second most malleable metal (after gold) and the sixth most ductile. Aluminium is a good
heat conductor, which is why it is often used to make saucepans.

Fig 1. BOHR Diagram.

5.1.5.1 The ore: Bauxite

The most common aluminium ore is bauxite. The name "bauxite" comes from the southern
France village of Les Bauxs where it was discovered in 1821. The term bauxite actually refers
to any ore or mixture of minerals that is rich in the oxide that is formed from aluminous
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rocks. Most bauxite contains about 40-60% alumina. Deposits are found all over the world,
from Spain through Southern France, Italy, Austria, Hungary and Greece, (providing the base
for the European aluminum industry), with even larger deposits in subtropical and tropical
regions of Africa, West Indies, South America and Australia. Bauxite is refined first into
aluminium oxide trihydrate (alumina) and they electrolytic ally reduced into metallic
 aluminum. It takes two to three tones of bauxite to produce one ton of alumina and two tones
of alumina to produce one ton of aluminum metal.

ALUMINIUM PRODUCTION

Aluminium ore, most commonly bauxite, is plentiful and occurs mainly in tropical and sub-
tropical areas: Africa, West Indies, South America and Australia. There are also some deposits
in Europe. Bauxite is refined into aluminium oxide rehydrate (alumina) and then electrolytic
ally reduced into metallic aluminium. Primary aluminium production facilities are located all
over the world, often in areas where there are abundant supplies of inexpensive energy, such
as hydro-electric power.

Two to three tonnes of bauxite are required to produce one tonne of alumina and two tonnes
of alumina are required to produce one tonne of aluminium metal.

The aluminium industry relies on the Bayer process to produce alumina from bauxite. It
remains the most economic means of obtaining alumina, which in turn is vital for the
production of aluminium metal - some two tonnes of alumina are required to produce on
tonne of aluminium

5.1.5.2 The Bayer Process

The aluminium industry relies on the Bayer process to produce alumina from bauxite. It
remains the most economic means of obtaining alumina, which in turn is vital for the
production of aluminium metal - some two tonnes of alumina are required to produce one
tonne of aluminium.
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 Fig 2. Entire Bayer Process

The primary aluminium industry is dependent on a regular supply of alumina for four functions:

1. Basic raw material for aluminium production

2. Thermal insulator for the top of electrolytic cells

3. Coating for prebaked anodes

4. Absorbent filter for cell emissions

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 5.1.5.3. Alumina Production

Bauxite is washed, ground and dissolved in caustic soda (sodium hydroxide) at high pressure
and temperature. The resulting liquor contains a solution of sodium aluminate and
undissolved bauxite residues containing iron, silicon, and titanium. These residues sink
gradually to the bottom of the tank and are removed. They are known colloquially as "red
mud".The clear sodium aluminate solution is pumped into a huge tank called a precipitator.
Fine particles of alumina are added to seed the precipitation of pure alumina particles as the
liquor cools.

The particles sink to the bottom of the tank, are removed, and are then passed through a
rotary or fluidized calciner at 1100°C to drive off the chemically combined water. The result
is a white powder, pure alumina. The caustic soda is returned to the start of the process and
used again.

5.1.6 Aluminium’s Life Cycle

There exists a significant potential to reduce greenhouse gas emissions through the increased
use of aluminium in transportation applications and from the increased use of recycled
aluminium. But there also is a challenge because of the relatively high-energy consumption
and greenhouse gas emissions associated with the production of primary aluminium.

In 1997 the Member Companies of the International Aluminium Institute (IAI) (who
represent most of the World's production of primary aluminium excluding Russia and China)
concluded that the Industry needed to develop as complete an understanding as possible of
the positive contributions that aluminium makes to the environmental and economic well-
being of the world's population as well as of any negative economic or environmental impacts
that its production might cause. Therefore a Life Cycle Analysis study was initiated. The
scope of the study goes far beyond the production processes alone. It also covers the impacts
and benefits of the material throughout the lifespan of the different aluminium products
including its reuse and recycling.

The IAI therefore chose as its first task the quantification of the carbon dioxide and per
fluorocarbon greenhouse gas (GHG) emissions from the worldwide aluminium industry and
secondly the development of estimates of the implications in terms of Greenhouse Gas
Emissions of the increased use of aluminium for the manufacture of cars and trucks. Data on
energy consumption and greenhouse gas emissions associated with aluminium production,
product utilization and recycling was gathered from over 80% of the worldwide industry
including estimates from Russia and China.

5.1.6.1 Alumina-Bauxite Refining

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To produce primary aluminium metal, bauxite ore is mined , transported to processing plants
called refineries, crushed, digested precipitated and calcined to produce alumina (Al 2O3 )
powder in the Process. On average, alumina refining consumes 75 kg of caustic soda and 48
kg of lime per metric tonne of alumina. Greenhouse gas emissions of 991 kg of CO 2e (carbon
dioxide equivalents) per metric tonne of alumina are generated primarily from fuel
consumption and from energy consumed in producing the lime and caustic soda ancillary
materials.
 Fig.3 Alumina-Bauxite Refining

5.1.6.2 Aluminium Smelting

Primary aluminium is produced by the Hall-Heroult electrolytic process in which alumina is

reduced to aluminium metal at a carbon electrode or anode in the following reaction:

2Al2O3 + 3C -----> 4Al + 3CO2

This alumina is dissolved in a molten cryolite bath, and electric current is passed through this
solution, thereby separating the alumina into aluminium and oxygen. The oxygen
immediately reacts with the carbon anodes to produce carbon dioxide as an off gas.

Data was received in 1999 from worldwide aluminium smelters producing 19.8 million
metric tonnes of primary aluminium that represents 89% of worldwide aluminium smelting
operations. Across all technologies, electricity consumption averaged 15.95 kWh per kg of
molten metal. The consumption of fuels to produce this electricity generated 5.8 metric
tonnes of CO2 per tonne of metal. An additional 1.6 metric tonnes of CO 2 per metric tonne are
generated in the electrolytic process.

5.1.7 Aluminium Sustainability

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 Aluminium is a sustainable material. At the current primary aluminium production level,
known bauxite reserves will last for hundreds of years. More than 55 per cent of the world's
aluminium production is powered by renewable hydro-electric power. Products made from
aluminium can be recycled repeatedly to produce new products. The increasing use of
recycled metal saves both energy and mineral resources needed for primary production. The
IAI has produced the "Aluminium for Future Generations Sustainability Update".

5.1.8 Transport

High aluminium content vehicles can be up to 50 per cent lighter than conventional vehicles.
The consequent fuel savings over the lifetime of a vehicle far more than repay the initial
investment in energy to make primary aluminium. Lighter cars, trucks and trains mean less
fuel consumption and emissions, less wear and tear on roads and tracks. As vehicle emissions
contribute up to one-third of global greenhouse Gas emissions, replacement of the current
stock of vehicles with high aluminium content, lighter, low emission vehicles will make a
significant contribution to the reduction of greenhouse gas emissions.

5.1.9 Recyclability

Almost every aluminium product can be commercially (i.e. profitably) recycled at the end of
its useful life, without loss of metal quality or properties. The increasing use of recycled
aluminium in many applications (up to 60 per cent in vehicles) gives aluminum’s established
credibility as a "green" metal a further boost.

5.1.10 Aluminium in Building

In buildings, aluminium panels are corrosion resistant and therefore virtually maintenance
free. Aluminium's lightness means easy construction, while its thermal insulation properties
derived from the ability to design thermal breaks in extrusions, and from aluminium foil's
reflectivity, conserve heating energy.

Aluminium buildings look good too! A large amount of waste building materials go to landfill
sites at a cost to both the economy and the environment. In contrast aluminium is recycled in
a way that pays for itself and is sustainable.

5.1.11 Aluminium in Packaging

Aluminium in packaging preserves food quality and avoids waste, and its low weight reduces
fuel consumption and emissions during transportation.

5.1.12 Aluminium and Electric Power

Aluminium's high conductivity makes it an excellent material for electrical power

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transmission over long distances. The use of aluminium cables reduces power losses
significantly and therefore conserves energy.

5.1.13 Aluminium and Water

WHO recognized the beneficial effects of the use of aluminium as a coagulant in water
treatment to remove unwanted material including several organisms known to cause disease
 Aluminium has indeed fulfilled Dickens's prophecy ... but even he would no doubt be amazed
at the thousands of different products in which it is now used throughout the world.

5.1.14 Aluminium Applications

Aluminium –wonder metal has many remarkable features:-

 Aluminium weighs only 0.34 times as much as iron.

 Aluminium is a good reflector of thermal, optical & electromagnetic radiation.
 Pure unalloyed Aluminium is soft, but Aluminium alloys may surpass the tensile
strength of steel.
 Even minor additions of iron have no significant magnetic field of Aluminium.
 Aluminium surface can be reinforced to protect from weather & chemical corrosion.
 The metal & its source are non- toxic and it is therefore an important packaging
material for food.
 Aluminium is equivalent in conductance while being 50% lighter.
 Aluminium can be formed into different shapes by any of the usual process in
industry.
 Aluminium permits rapid heat dissipation.
 Many possibilities are available for treating and texturing Aluminium surface .
Table 1. Aluminium applications

Sector Major application

Transport

Automobiles Radiators, engine components , body sheets

Aerospace Structural components, commercial airframes

Rail Wagons, coaches

Packaging Beverage containers, food containers, aerosols,

Packets, caps and closures.

Building Cladding, roofing, window and door frames, fencing

Electrical engineering Bus bars, transformers,generators,conductor & cables

Mechanical engineering Bearings, heat exchangers, hydraulic system

Household application Refrigerators and freezers

Machinery and equipments Irrigation piping, agricultural machineries, chemical

Appliances.
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Market Position of Aluminium

Table: 2 ranking of the top 10 countries in world with respect to aluminium production.
 NAME RANK

CHINA (16,800 thousand of tones) 1

RUSSIA (3850 thousand of tones) 2

CANADA (2920 thousand of tones) 3

AUSTRALIA (1950 thousand of tones) 4

UNITED STATE (1720thousand of tones) 5

BRAZIL (1550 thousand of tones) 6

INDIA (1400 thousand of tones) 7

UNITED ARAB EMIRATES (1400 thousand of tones) 8

BAHRIN (870 thousand of tones) 9

NORWAY (800 thousand of tones) 10

Table: 3 Production of aluminium in India. (Unit in tones)

Location
Company 2008-09 2009-10 2010-11(up to Dec
2010**)

NALCO 3,61,262 431488 3,32,195 Damanjodi (Orissa)

HINDALCO 5,23,453 5,55,404 3,99,253 Renukoot (UP)

MALCO 23,224# _ _ Chennai(Tamil Nadu)

BALCO@ 3,56,781 2,68,452 1,92,383 Korba (MP)

VAL 82,031 2,69,083 2,76,013 Pune (MH)

TOTAL 13,46,751 15,24,751 11,99,844 _

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# MALCO has closed its smelter since December, 2008.

@ BALCO has closed its old smelter of 1,00,000 tonnes per annum capacity due to its
non-viability.

** Compiled on the basis of information provided by primary aluminium producers to

the Ministry.
 It is an intermediate product obtained from bauxite for production of Aluminium. Many
developing countries, which are having plenty of bauxite reservoirs and are, having high cost
of power generation, prefer to produce Alumina as value added product for export purpose
rather than exporting bauxite. On the other side the countries having cheaper energy
availability want to improve Alumina for their smelter instead of bauxite so as to reduce
tonnage and transport problem. The production of Alumina in India started in 1945. Since
then the capacity of the same has increased from 4000 tones to 2.0 million tones at present.

The demand of Alumina in the present past is well in near future in the world along with
prices are given.

Table 4. Top 10 Aluminium Producers (in world,companies)

RANK COMPANY Figures in million tonnes

1 UC RUSAL 4,153

2 Alcoa 3965

3 Alcan 3454

4 Chalco 2034

5 Hydro Aluminium 1576

6 BHP Billiton 1349

7 Dubal 872

8 Rio Tinto 864

9 Alba 860

10 Centuty Aluminium 741

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 Table 5.NALCO CAPACITY

NALCO EXISTING CAPACITY AFTER (2ND)EXPANSION

CAPACITY

BAUXITE MINES 4.8 MPTY 6.3 MPTY

ALUMINIUM 1.575MTPY 2.1 MPTY

REFINERY

ALUMINIUM SMELTER 3,45,000 TPY 4,60,000 TPY

CAPTIVE POWER PLANT 8*120 MW 10*120 MW
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Table 6. Region Wise Sales Structure of Alumina

Products WESTERN EASTERN SOUTHERN NORTHERN

AL hydrate 489.364 1378.304 4754.108

Calcined 4168.592 2049.641 2448.227

 alumina

Spe.Grade 1.423 507.154 18.598 9.716

hydrate

Special 429.9 178.509 496.943 20.605

alumina

Zeolite 4342.983 35.608 27.72 3485.916

Table.7 . Dominant Players of Aluminium Industry

COMPANIES CAPACITY(000MTY)

ALCOA 4317

ALCAN 1760

PECHINEY 1105

BILLITON 901

HYDRO ALUMINIUM 751

RIO TINTO/ COMALCO 749

ALUSAF 660

KAISER 519

TOTAL WESTERN 18200

COUNTRIES

GLOBAL 25,400

Table 8. Aluminium Ore Capacity of Top 10 Countries (in million tonnes):

COMPANY ESTIMATED MINING ALUMINA ALUMINIUM

BAUX. CAPACITY CAPACITY CAPACITY

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RESR

GUINEY 8200 16.65 .60

AUSTRALIA 4572 39.55 9.91 1.422

BRAZIL 3072 7.66 1.23 1.213

 JAMAICA 2032 9.85 1.6

INDIA 2650 4.50 1.64 .633

GUYANA 1020 3.00 .62

GREECE 760 3.71 .148

INDONESIA 710 1.30 .225

SURINAM 500 1.30 .030

VENZUELA 500 1.00 1.35 .630

5.1.15 Global Consumption and Domestic Consumption

The growth of worldwide consumption has been well over 8% per year till mid 70’s. But by
the year 2001, the global consumption of Aluminium has declined by about 4%.

Out of the global consumes about 27%. Hence, in case of any economic slow down in the
western world , especially in the US and JAPAN , it will affect the significantly by 12% in the
USA and 6.7% in JAPAN, where as in china, CIS and middle east, there was an excellent
demand of 10% , 9% and 16% respectively during the same period.

During the year 2003-04 , the world consumption of primary Aluminium is about 28,103 MT
against the world’s production of about 28, 489 MT million tones and there by creating a net
surplus of 386 MT in the global market.

During the same period the world supply of Aluminium is around 35,085 MT against the total
world consumption of 34, 852 MT there by showing a deficit of 203 MT. since the economies
of EUROPE, JAPAN, other western world and US still remain bearish, the global market has
to face uncertainties . However, the strong Chinese demand has helped the Indian industry.

Table 9. Global Trend of Aluminium Usage (Consumption):

SECTORS USAGE

Transportation 32%

Packaging 21%

Construction 13%

Electrical 07%

Consumer durables 07%

Machinery & 06%

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equipment

Others 14%

Table 10. Aluminium Usage of Western World and India (%)

 SECTORS WESTERN WORLD INDIA

Transportation 27% 18%

Packaging 22% 07%

Construction 21% 06%

Electrical 08% 35%

Consumer durables 07% 72%

Others 15% 22%

Table 11. Country Wise Usage of Aluminium in Different Sector (%)

SECTORS INDIA USA UK JAPAN

Electrical 35 9.30 8.60 7.6

Transport 18 20.10 21.90 31.5

Consumer durable 12 7.5 7.10

Packaging 7 35.40 10.50 9.7

Construction 06 16.9 15.45 25

Others 22 10.70 30.45 26.2

Table 12. Usage of Aluminium in India

SECTORS INDIA

TRANSPORTATION 18%

PACKAGING 07%

CONSTRUCTION 06%

ELECTRICAL 35%

CONSUMER DURABLES 12%

OTHERS 22%
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 5.2 Profile of Nalco
5.2.1 Mission

"To develop and strengthen technology expertise pertaining to Bauxite, Alumina and
Aluminium in the next five years, which will enable NALCO to be self sustained in the field
of Bauxite mining, Alumina Refining and Aluminium Smelting technology.”

“To achieve growth in business with global competitive age providing satisfaction to the
customers, employees, share holders and community at large.”

5.2.2 Vision

"To set up world class, state of the art research and development facilities to enable NALCO
to achieve excellence and sustainability in process, product and technology in the field of
Bauxites, Alumina, Aluminum, Power and allied areas including downstream products.

5.2.3 Objectives

 To maximize capacity utilization.

 To optimize operational efficiency and productivity.
 To maintain highest international standards of excellent in product quality, cost
efficiency and customer service.
 To provide a steady growth business by technology up gradation, expansion of
diversification.
 To have global presence and earn foreign exchange.
 To maintain leadership in domestic market.
 To install financial discipline at all levels for achieving cost and budgetary
controls , optimize utilization of working capital and effective cash flow
management
 To maximize return on investment
 To develop a strong R&D base and increase business development activities.
 To promote a result oriented organizational ethos and work culture that empowers
employees and helps realization of individual and organizational goals.

5.2.4 AWARDS & ACCOLADES

● Indra priyadarshini Vrikshamitra Award by Govt.of India-1994
● First CAPEXIL Export Award-1988
● London Metal Exchange Registration-May 1989
● First EEPC Export Award-1998-99
● Indra Gandhi Paryavaran puraskar by Govt. of India-2000
● FIEO Niryat Shree Awartds-2005-06
● Navaratna Status-2008
● Premier Trading House Status-2009
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● 500th shipment of Alumina from Vizag port-2010

● Best listed CPSE Awards-2010
● ISO 9001:2000,ISO 14001,OHSAS 18001 & SA 8000 Certifications
● Nalco achieves record production and sales in 2010-11
 Nalco Today

Today as an ISO 9001 company, Nalco has emerged as the largest integrated Bauxite-
Alumina-Aluminium complex in Asia enabling India to witness a quantum jump in Alumina
and Aluminium production. The company for the final time created exportable surplus
Alumina and Aluminum production. The company for the first created exportable surplus in
Alumina and helped India top focus on its massive Bauxite resources in the east coast export
oriented Aluminum plants.

5.2.5 Segments of Nalco

NALCO has emerged as the largest integrated Bauxite-Alumina-Aluminium complex in Asia

enabling India to witness a quantum jump in Alumina and Aluminium production. The
company for the final time created exportable surplus Alumina and Aluminium production.
The company for the first created exportable surplus in Alumina and helped India top focus
on its massive Bauxite resources in the east coast export oriented Aluminum plants . The
integrated complex has five segments like Bauxite mine, Aluminum refinery, Aluminum
smelter, Captive power plant and port facilities.

5.2.5.1 Bauxite Mine

NALCO's bauxite mine, spread over 18 kms., is located at Panchpatmali hills in Koraput
District of Odisha. The original mining capacity of 4.8 million tonnes per year(MTPY) is
being upgraded to 6.3 MTPY under the 2nd phase expansion, which will be further upgraded
to 6.8 MTPY under the up gradation project of mines & refinery. Approximately 90% of the
bauxite from the mine represents Gibbsitic Alumina, also called Tri-hydrate Alumina, a
property which allows it to be digested at a relatively low temperature and at atmospheric
pressure during the alumina refining process.
On Panchpatmalli hills of Koraput district in orissa a fully mechanized open cast mine of 24
million tpy capacity is in operation since November1985 serving feed stock to Aluminum
refinery at Damon Jodi the capacity is being expanded to 4.8 million tpy capacity.

The Salient Feature:

 Area of deposit – 18sq.Km

 Life of deposit – Over 100 years
 Ore Quality – Aluminum 45%,Silica 2%

5.2.5.2 Alumina Refinery

Alumina refinery plant of the Company is situated at Damanjodi in Koraput District of

Odisha. The plant is located about 14 kms. from the Panchpatmali bauxite mines. The mined
bauxite is transported to refinery plant by a 14.6 km long single flight multi curve
1,800tonnes per hour (TPH) capacity cable belt conveyor, unique of its kind in India. Bauxite
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is processed and refined and alumina is produced and transported to aluminum smelter plant
at Angul as well as to the storage and handling facilities at Visakhapatnam port by specially
designed rail wagons.

The present capacity of alumina refinery is 1.575 MTPY consisting of three production lines
of each of 525,000 metric TPY. The capacity is being augmented to 2.1 MTPY under 2 nd
phase expansion with addition of one more stream and it will be further enhanced to 2.275
 MTPY under the up gradation project of mines & refinery. The produced alumina is
transported to Angul to cater to the requirements of the smelter plant for production of
primary aluminium metal, alumina that remains surplus after internal consumption at smelter
plant is sold to third parties primarily in the export markets.

The unique features of NALCO's alumina refinery are cent per cent capacity utilization, use
of temperature atmospheric digestion technology, production of sandy calcined alumina and
cogeneration of power for its captive use. The process technology was provided by
Aluminium Pechiney (now Rio Tinto Alcan)

5.2.5.3 Alumina Smelter

The Company's aluminum smelter plant is situated at Angul in Odisha. The smelter plant is
about 699 kms. from the alumina refinery plant, 5 kms. from the captive power plant, 564
kms. from Visakhapatnam port facilities, 194 kms. from the Paradeep port and 551 kms. from
the Kolkata port. The aluminum metal produced at aluminum smelter plant is transported to
Visakhapatnam port and also to Paradeep port by rail for domestic sale as well as for export.

The production capacity of 3,45,000 TPY has been further increased to 4,60,000 TPY under
the 2nd Phase Expansion of the Company. The smelting process is carried on by using
electrolytic reduction for conversion of alumina into primary aluminium metal. From the pot-
line, the molten aluminum is routed either to casting units, where the aluminum is cast into
ingots, sow ingots, billets, wire rods, cast strips and alloy ingots, or to holding furnaces at flat
aluminum products unit where the molten aluminum is rolled into various cold-rolled
products or cast into aluminum strips. The aluminum smelter operates on one of the modern
electrolysis technology, namely the AP-18 provided by Aluminum Pechiney (now Rio Tinto
Alcan), which is being upgraded from time to time.

Salient Features:

 Advance 180 KHz cell technology.

 Micro processor based port regulation system.
 Pume treatment plant with dry scrubbing system for pollution control.
 Integrated facility for manufacturing anode carbon.

All the activities in production process of Nalco carry out by different section like:

5.2.5.3.1Pot Rooms

The main process area of the smelter is port rooms. At Nalco smelter there are 4 pot rooms
each of 800 metres of length and 19 metres of width. Each pot room house has 120 pots, like
this 240 pots forms one pot line and there in total 480 pots are 2 pot lines in smelter. The 120
pots located in a pot rooms are divided by the centre passage into 2 groups of 60 pots each.
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5.2.5.3.2Cathode System

The cathode system consists of a rigid rectangular still rank of size 10.24m*4.95m*1.79m
lined with insulating and fire brick for heat insulation the ceramic reactories are covered with
carbon reactories both at the button and the sides which forms the hearth and receptable for
molten aluminum and fluoride salt bath.
 5.2.5.3.3 Anode System

It consists of 16 pre backed anodes dipping in the molten electrolyte contained in the cathode
cavity. The individual pre backed anode assembly consists of carbon block attached to a
bracket which again is connected with a long aluminum bar called the anode system.

5.2.5.3.4 Carbon Area or Anode Plant

Nalco anode plant consists mainly of 3 areas namely

1. green anode plant

2. backing furnaces
3. rodding shop
In the green anode plant carbon paste is manufactured from calcined petroleum coke and coal
far pitch. The formed anodes are backed in the backing furnaces to obtain the necessary
mechanical strength and electrical conductivity. The backed anodes are sent to the rodding
shop where the anodes are fitted with the stem brackets.

5.2.5.3.5 Cast House

The molten Aluminum tapped out from the pots periodically is sent to the cast house where it
is cast into ingots, at Nalco smelter cast house receives and cast the entire 221,000 tones of
liquid aluminum each other. The metal tapped in transported to the cast house in open ladles
and stored in the holding furnaces. In all there are & number holding furnaces each of 38 MT
capacity.

5.2.5.4 Captive Power Plant

The coal based captive power plant of the Company is strategically located about 5 kms.
away from the aluminium smelter plant at Angul to have access to low cost electric power
and to minimize transmission losses of power. The location of captive power plant at Angul
was strategically planned at the proximity of Talcher coalfields. NALCO sources major coal
requirements for its captive power plant from Talcher coalfields through 18.5 kms. captive
railway system enabling transport of critical and bulk requirement of coal at relatively low
cost.
The captive power plant has an electric power generation capacity of 1200 MW by way of ten
turbo generators, each rated at 120 MW. The captive power plant meets the entire electric
power requirement of aluminum smelter plant. It also provides approximately 35% of the
electricity power requirement of alumina refinery plant besides supplying the surplus power
to state grid

5.2.6 Raw Materials Used

The basic raw materials required for the production of aluminum are electronic energy alumina, CGM
line white brand, caustic soda, hydrate alumina, some other raw materials required for smelter like
calcinade petroleum, coke and coal for pitch, available from Baruni-Haladia-refineries and vizag steel
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plant respectively, the actual requirements of other raw material of this plant as follows.
 Calcined petroleum coke-87.100 tones
 Coal tan pitch-27,000 tones
 Heavy fuel oil – 12,390 tones
 Heal transper fluid- 3000
 Process water- 20000M
 Salient Features

 Micro processor based burner management system for optimum thermal efficiency.
 Computer controlled data acquisition system for online monitoring.
 Automatic turbine run-up system
 Specially designed barrel type high pressure turbine.
 Electrostatic precipitators with advanced intelligent controllers.
 Wet disposed of ash.

The raw water for the plant is drain from river Brahmani through a 7 KM long double circuit
pipe line, discharging 7200 m3 /hour of water. The coal demand is met from a mine of 3.5
million tone capacity opened up for Nalco at bharatpur in talcher by Mahanadi coal fields ltd.
The power plant is interconnected with the static grid.

5.2.7 Products

5.2.7.1 Aluminium Metal

(CG, EC&LME grades)

1. Ingots (Standard Ingots,sow Ingot,T-ingots)

2. Wire Rods
3. Billets (in 5 size)
4. Alloy wire rods
5. Cast strips

5.2.7.2 Alumina & Hydrate

1.Calcinated Alumina

2.Alumina hydrated

5.2.7.3 Specialty Alumina & Hydrates

5.2.7.4 Rolled products (coils & sheets)

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 (INGOTS) (SOWS INGOTS)

(BILLETS) (T-INGOTS)

(WIRE RODS) (ROLLED PRODUCT)

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 5.2.8 Plant Location

Nalco Nagar is situated within 5km of Angul town. Angul was once a tidal state. It is fairly
big and bustlingly town on the national highway no.42 which is the main highway connecting
Bhubaneswar with Raipur (MP), sambalpur, sundarghar and Rourkela. Nalco has established
its smelter plant, captive power plant and its town ship close to the national highway. The
place is easily accessible from Cuttack and Bhubaneswar by road and rail. Today in the
vicinity of Angul a large number of industries have come up. The other important industry in
and around this place are heavy water of atomic energy, Commission talcher, coal mines of
mahanadi coal fields limited and thermal power plants of NTPC.

The Nalco town ship known as Nalco nagar is modern and well planned. In addition to 2947
dwelling units and trainees hostel with 300 rooms, Nalco nagar may civic facilities like
community centres, clubs , stadium , swimming pool, market complexes etc. it has establish
50 bedded hospital with ultra modern facilities.

5.2.9 Organizational Structure

Nalco is a govt. of enterprise under the administration control of the ministry of mines. The
company is managed by board of directors appointed by the president of India. The board
consists of 16 directors including the chair-cum managing director of the company. There are
6 full time functional directors heading production, finance project & technical, personnel
&administrative disciplines. There are our senior govt. officials nominated to the board as
directors on ex-officio basis. Besides there are 2 non official directors in the board appointed
to present the interest of financial institution, allied industry & R&D objectives of the
company. Thus the board of company is a full of highly experienced & outstanding potentials
drawn from various fields of specialization.

The management control system is based on delegation of authority & individual

accountability for results. The responsibility and authority to take decisions on various
matters are delegated by the chairman-cum-MD to different levels in the management.

5.2.10 Human Resource

About 7393 persons possessing a verity of skills, qualifications and competence are at the
services of Nalco, Nalco is truly youth with the average age of the employees being below 40
years. Starting with a core group of 262 employees in the 1982, the progressive growth in
man power has taken place in a planned manner matching the different stages of the project.
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 5.2.10.1 Composition of Manpower

Skilled personnel-3717

Semi skill & unskilled personnel- 1041

Executives-1783

Supervisors-852

TOTAL : 7393 (Human Resources)

5.2.11 Overall Industrial Relations Situation

There are trade unions operating in the organization. But they are much concerned with their
rights rather than duties. The trade union leaders are much interested in the training tours and
other benefits provided by the company and least concerned about the worker’s problem and
other activities for the development of the organization. They are guided by their self interest.
Common employees are not much committed towards trade unions. There is no recognized
trade union. Before 3/4 year there was a trade union was recognized by secret- ballot method

5.2.12 Organizational Culture

Nalco being a profitable public sector unit concerned about good relationships among the
superior and subordinate, employee etc. in normal time people work loosely, thinking that the
company is fulfilling its target. So there is no need for hard work. But in 1998 while it was
facing a bad situation people devoted their heart and soul to the organization. The worked for
day and night and brought the situation under control.

The employees of Nalco are given a very big package with number of incentives and other
facilities. But these actually do not motivate employees. Because incentives work for a short
time. It is the fear motivation which works behind every employees and makes the employee
motivated towards their respective jobs. Employees in Nalco are individually accountable
towards their work. If a task is given to them, they accomplish the task in a proper manner
and in a proper time.
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 5.3 Marketing Strategy
A marketing strategy is a process that can allow an organization to concentrate its limited
resources on the greatest opportunities to increase sales and achieve a sustainable competitive
advantage. A marketing strategy should be centered around the key concept that customer
satisfaction is the main goal.

A marketing strategy is most effective when it is an integral component of firm strategy,

defining how the organization will successfully engage customers, prospects, and competitors
in the market arena. Corporate strategies, corporate missions, and corporate goals. As the
customer constitutes the source of a company's revenue, marketing strategy is closely linked
with sales. A key component of marketing strategy is often to keep marketing in line with a
company's overarching mission statement.

5.3.1 Basic theory

The basic theory of marketing strategy is:

 Target Audience
 Proposition/Key Element
 Implementation
 The Five D's
 Tactics and actions

A marketing strategy can serve as the foundation of a marketing plan. A marketing plan
contains a set of specific actions required to successfully implement a marketing strategy. For
example: "Use a low cost product to attract consumers. Once our organization, via our low
cost product, has established a relationship with consumers, our organization will sell
additional, higher-margin products and services that enhance the consumer's interaction with
the low-cost product or service."

A strategy consists of a well thought out series of tactics to make a marketing plan more
effective. Marketing strategies serve as the fundamental underpinning of marketing plans
designed to fill market needs and reach marketing objectives[5]. Plans and objectives are
generally tested for measurable results.

A marketing strategy often integrates an organization's marketing goals, policies, and action
sequences (tactics) into a cohesive whole. Similarly, the various strands of the strategy ,
which might include advertising, channel marketing, internet marketing, promotion and
public relations can be orchestrated. Many companies cascade a strategy throughout an
organization, by creating strategy tactics that then become strategy goals for the next level or
group. Each one group is expected to take that strategy goal and develop a set of tactics to
achieve that goal. This is why it is important to make each strategy goal
measurable.Marketing strategies are dynamic and interactive. They are partially planned and
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partially unplanned. See strategy dynamics.

 5.3.2 Types of strategies

Marketing strategies may differ depending on the unique situation of the individual business.
However there are a number of ways of categorizing some generic strategies. A brief
description of the most common categorizing schemes is presented below:

Strategies based on market dominance - In this scheme, firms are classified based on their
market share or dominance of an industry.

Typically there are three types of market dominance strategies:

 Leader -
 Challenger -
 Follower –

Porter generic strategies - strategy on the dimensions of strategic scope and strategic
strength. Strategic scope refers to the market penetration while strategic strength refers to the
firm’s sustainable competitive advantage.

 Product differentiation
 Market segmentation
Innovation strategies - This deals with the firm's rate of the new product development and
business model innovation. It asks whether the company is on the cutting edge of technology
and business innovation. There are three types:

 Pioneers
 Close followers
 Late followers

Growth strategies - In this scheme we ask the question, “How should the firm grow?”. There
are a number of different ways of answering that question, but the most common gives four
answers:

 Horizontal integration
 Vertical integration
 Diversification
 Intensification
A more detailed scheme uses the categories:

 Prospector
 Analyzer
 Defender
 Reactor
Marketing warfare strategies - This scheme draws parallels between marketing strategies
and military strategies.
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5.3.3 Strategic models

Marketing participants often employ strategic models and tools to analyze marketing
decisions. When beginning a strategic analysis, the 3Cs can be employed to get a broad
understanding of the strategic environment. An Ansoff Matrix is also often used to convey an
 organization's strategic positioning of their marketing mix. The 4Ps can then be utilized to
form a marketing plan to pursue a defined strategy.

 Marketing in Practice

 The Consumer-Centric Business

There are a many companies especially those in the Consumer Package Goods (CPG) market
that adopt the theory of running their business centered around Consumer, Shopper &
Retailer needs. Their Marketing departments spend quality time looking for "Growth
Opportunities" in their categories by identifying relevant insights (both mindsets and
behaviors) on their target Consumers, Shoppers and retail partners. These Growth
Opportunities emerge from changes in market trends, segment dynamics changing and also
internal brand or operational business challenges.The Marketing team can then prioritize
these Growth Opportunities and begin to develop strategies to exploit the opportunities that
could include new or adapted products, services as well as changes to the 7Ps.

Real-life marketing primarily revolves around the application of a great deal of common-
sense; dealing with a limited number of factors, in an environment of imperfect information
and limited resources complicated by uncertainty and tight timescales. Use of classical
marketing techniques, in these circumstances, is inevitably partial and uneven.

Aldred Riachi Ph.D Developed a new strategic approach called the Five D's of competitive
Advantage. The model emphasized on adopting the following: Develope, Distinguish,
Diagnose, Decisiveness and Doctrine.

Thus, for example, many new products will emerge from irrational processes and the rational
development process may be used (if at all) to screen out the worst non-runners. The design
of the advertising, and the packaging, will be the output of the creative minds employed;
which management will then screen, often by 'gut-reaction', to ensure that it is reasonable.

For most of their time, marketing managers use intuition and experience to analyze and
handle the complex, and unique, situations being faced without reference to theory. This will
often be 'flying by the seat of the pants', or 'gut-reaction'; where the overall strategy, coupled
with the knowledge of the customer which has been absorbed almost by a process of osmosis,
will determine the quality of the marketing employed. This, almost instinctive management,
is what is sometimes called 'coarse marketing'; to distinguish it from the refined, aesthetically
pleasing, form favored by the theorists.

5.3.3.1 The Marketing Mix (The 4 P's of Marketing)

Marketing decisions generally fall into the following four controllable categories:
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 Product
 Price

 Place (distribution)

 Promotion
 The term "marketing mix" became popularized after Neil H. Borden published his 1964
article, The Concept of the Marketing Mix. Borden began using the term in his teaching in the
late 1940's after James Culliton had described the marketing manager as a "mixer of
ingredients". The ingredients in Borden's marketing mix included product planning, pricing,
branding, distribution channels, personal selling, advertising, promotions, packaging, display,
servicing, physical handling, and fact finding and analysis. E. Jerome McCarthy later grouped
these ingredients into the four categories that today are known as the 4 P's of marketing,
depicted below:

Fig 4. The Marketing Mix

These four P's are the parameters that the marketing manager can control, subject to the
internal and external constraints of the marketing environment. The goal is to make decisions
that center the four P's on the customers in the target market in order to create perceived value
and generate a positive response.

i) Product Decisions

The term "product" refers to tangible, physical products as well as services. Here are some
examples of the product decisions to be made:

 Brand name
 Functionality

 Styling

 Quality
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 Safety

 Packaging

 Repairs and Support

 Warranty
  Accessories and services
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 ii) Price Decisions

Some examples of pricing decisions to be made include:

 Pricing strategy (skim, penetration, etc.)

 Suggested retail price

 Volume discounts and wholesale pricing

 Cash and early payment discounts

 Seasonal pricing

 Bundling

 Price flexibility

 Price discrimination

iii) Distribution (Place) Decisions

Distribution is about getting the products to the customer. Some examples of distribution
decisions include:

Distribution channels

 Market coverage (inclusive, selective, or exclusive distribution)

 Specific channel members

 Inventory management

 Warehousing

 Distribution centers

 Order processing

 Transportation

 Reverse logistics

iv) Promotion Decisions

In the context of the marketing mix, promotion represents the various aspects of marketing
communication, that is, the communication of information about the product with the goal of
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generating a positive customer response. Marketing communication decisions include:

 Promotional strategy (push, pull, etc.)

 Advertising

 Personal selling & sales force

  Sales promotions

 Public relations & publicity

 Marketing communications budget

Limitations of the Marketing Mix Framework

The marketing mix framework was particularly useful in the early days of the marketing
concept when physical products represented a larger portion of the economy. Today, with
marketing more integrated into organizations and with a wider variety of products and
markets, some authors have attempted to extend its usefulness by proposing a fifth P, such as
packaging, people, process, etc. Today however, the marketing mix most commonly remains
based on the 4 P's. Despite its limitations and perhaps because of its simplicity, the use of this
framework remains strong and many marketing textbooks have been organized around it.

5.3.3.2 The BCG Growth-Share Matrix

The BCG Growth-Share Matrix is a portfolio planning model developed by Bruce Henderson
of the Boston Consulting Group in the early 1970's. It is based on the observation that a
company's business units can be classified into four categories based on combinations of
market growth and market share relative to the largest competitor, hence the name "growth-
share". Market growth serves as a proxy for industry attractiveness, and relative market share
serves as a proxy for competitive advantage. The growth-share matrix thus maps the business
unit positions within these two important determinants of profitability.

Fig 5. BCG Growth-Share Matrix

This framework assumes that an increase in relative market share will result in an increase in
the generation of cash. This assumption often is true because of the experience curve;
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increased relative market share implies that the firm is moving forward on the experience
curve relative to its competitors, thus developing a cost advantage. A second assumption is
that a growing market requires investment in assets to increase capacity and therefore results
in the consumption of cash. Thus the position of a business on the growth-share matrix
provides an indication of its cash generation and its cash consumption.
 Henderson reasoned that the cash required by rapidly growing business units could be
obtained from the firm's other business units that were at a more mature stage and generating
significant cash. By investing to become the market share leader in a rapidly growing market,
the business unit could move along the experience curve and develop a cost advantage. From
this reasoning, the BCG Growth-Share Matrix was born.

The four categories are:

 Dogs - Dogs have low market share and a low growth rate and thus neither generate
nor consume a large amount of cash. However, dogs are cash traps because of the
money tied up in a business that has little potential. Such businesses are candidates for
divestiture.
 Question marks - Question marks are growing rapidly and thus consume large
amounts of cash, but because they have low market shares they do not generate much
cash. The result is a large net cash comsumption. A question mark (also known as a
"problem child") has the potential to gain market share and become a star, and
eventually a cash cow when the market growth slows. If the question mark does not
succeed in becoming the market leader, then after perhaps years of cash consumption
it will degenerate into a dog when the market growth declines. Question marks must
be analyzed carefully in order to determine whether they are worth the investment
required to grow market share.

 Stars - Stars generate large amounts of cash because of their strong relative market
share, but also consume large amounts of cash because of their high growth rate;
therefore the cash in each direction approximately nets out. If a star can maintain its
large market share, it will become a cash cow when the market growth rate declines.
The portfolio of a diversified company always should have stars that will become the
next cash cows and ensure future cash generation.

 Cash cows - As leaders in a mature market, cash cows exhibit a return on assets that is
greater than the market growth rate, and thus generate more cash than they consume.
Such business units should be "milked", extracting the profits and investing as little
cash as possible. Cash cows provide the cash required to turn question marks into
market leaders, to cover the administrative costs of the company, to fund research and
development, to service the corporate debt, and to pay dividends to shareholders.
Because the cash cow generates a relatively stable cash flow, its value can be
determined with reasonable accuracy by calculating the present value of its cash
stream using a discounted cash flow analysis.

Under the growth-share matrix model, as an industry matures and its growth rate declines, a
business unit will become either a cash cow or a dog, determined soley by whether it had
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become the market leader during the period of high growth.

While originally developed as a model for resource allocation among the various business
units in a corporation, the growth-share matrix also can be used for resource allocation among
products within a single business unit. Its simplicity is its strength - the relative positions of
the firm's entire business portfolio can be displayed in a single diagram.
 Limitations

The growth-share matrix once was used widely, but has since faded from popularity as more
comprehensive models have been developed. Some of its weaknesses are:

 Market growth rate is only one factor in industry attractiveness, and relative market
share is only one factor in competitive advantage. The growth-share matrix overlooks
many other factors in these two important determinants of profitability.
 The framework assumes that each business unit is independent of the others. In some
cases, a business unit that is a "dog" may be helping other business units gain a
competitive advantage.

 The matrix depends heavily upon the breadth of the definition of the market. A
business unit may dominate its small niche, but have very low market share in the
overall industry. In such a case, the definition of the market can make the difference
between a dog and a cash cow.

While its importance has diminished, the BCG matrix still can serve as a simple tool for
viewing a corporation's business portfolio at a glance, and may serve as a starting point for
discussing resource allocation among strategic business units.

5.3.3.3 SWOT Analysis

SWOT analysis is a simple framework for generating strategic alternatives from a situation
analysis. It is applicable to either the corporate level or the business unit level and frequently
appears in marketing plans. SWOT (sometimes referred to as TOWS) stands for Strengths,
Weaknesses, Opportunities, and Threats. The SWOT framework was described in the late
1960's by Edmund P. Learned, C. Roland Christiansen, Kenneth Andrews, and William D.
Guth in Business Policy, Text and Cases (Homewood, IL: Irwin, 1969). The General Electric
Growth Council used this form of analysis in the 1980's. Because it concentrates on the issues
that potentially have the most impact, the SWOT analysis is useful when a very limited
amount of time is available to address a complex strategic situation.The following diagram
shows how a SWOT analysis fits into a strategic situation analysis.

Situation Analysis
/ \
Internal Analysis External Analysis
/\ /\
Strengths Weaknesses Opportunities Threats
SWOT Profile

The internal and external situation analysis can produce a large amount of information, much
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of which may not be highly relevant. The SWOT analysis can serve as an interpretative filter
to reduce the information to a manageable quantity of key issues. The SWOT analysis
classifies the internal aspects of the company as strengths or weaknesses and the external
situational factors as opportunities or threats. Strengths can serve as a foundation for building
a competitive advantage, and weaknesses may hinder it. By understanding these four aspects
 of its situation, a firm can better leverage its strengths, correct its weaknesses, capitalize on
golden opportunities, and deter potentially devastating threats.

Internal Analysis

The internal analysis is a comprehensive evaluation of the internal environment's potential

strengths and weaknesses. Factors should be evaluated across the organization in areas such
as:

 Company culture
 Company image

 Organizational structure

 Key staff

 Access to natural resources

 Position on the experience curve

 Operational efficiency

 Operational capacity

 Brand awareness

 Market share

 Financial resources

 Exclusive contracts

 Patents and trade secrets

The SWOT analysis summarizes the internal factors of the firm as a list of strengths and
weaknesses.

External Analysis

An opportunity is the chance to introduce a new product or service that can generate superior
returns. Opportunities can arise when changes occur in the external environment. Many of
these changes can be perceived as threats to the market position of existing products and may
necessitate a change in product specifications or the development of new products in order for
the firm to remain competitive. Changes in the external environment may be related to:
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 Customers
 Competitors

 Market trends

 Suppliers

 Partners
  Social changes

 New technology

 Economic environment

 Political and regulatory environment

The last four items in the above list are macro-environmental variables, and are addressed in a
PEST analysis.

The SWOT analysis summarizes the external environmental factors as a list of opportunities
and threats.

SWOT Profile

When the analysis has been completed, a SWOT profile can be generated and used as the
basis of goal setting, strategy formulation, and implementation. The completed SWOT profile
sometimes is arranged as Fig

When formulating strategy, the interaction of the quadrants in the SWOT profile becomes
important. For example, the strengths can be leveraged to pursue opportunities and to avoid
threats, and managers can be alerted to weaknesses that might need to be overcome in order
to successfully pursue opportunities.

Strengths Weaknesses
1. 1.
2. 2.
3.

Opportunities Threats

1. 1.
2. 2.
3. 3.

Fig 5. SWOT profile

Multiple Perspectives Needed

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The method used to acquire the inputs to the SWOT matrix will affect the quality of the
analysis. If the information is obtained hastily during a quick interview with the CEO, even
though this one person may have a broad view of the company and industry, the information
would represent a single viewpoint. The quality of the analysis will be improved greatly if
interviews are held with a spectrum of stakeholders such as employees, suppliers, customers,
strategic partners, etc.
 SWOT Analysis Limitations

While useful for reducing a large quantity of situational factors into a more manageable
profile, the SWOT framework has a tendency to oversimplify the situation by classifying the
firm's environmental factors into categories in which they may not always fit. The
classification of some factors as strengths or weaknesses, or as opportunities or threats is
somewhat arbitrary. For example, a particular company culture can be either a strength or a
weakness. A technological change can be a either a threat or an opportunity. Perhaps what is
more important than the superficial classification of these factors is the firm's awareness of
them and its development of a strategic plan to use them to its advantage.

5.3.4 7S Framework

It's all very well devising a strategy, but you have to be able to implement it if it's to do any
good. The Seven S Framework first appeared in "The Art Of Japanese Management" by
Richard Pascale and Anthony Athos in 1981. They had been looking at how Japanese
industry had been so successful, at around the same time that Tom Peters and Robert
Waterman were exploring what made a company excellent. The Seven S model was born at a
meeting of the four authors in 1978. It went on to appear in "In Search of Excellence" by
Peters and Waterman, and was taken up as a basic tool by the global management consultancy
McKinsey: it's sometimes known as the McKinsey 7S model.

Managers, they said, need to take account of all seven of the factors to be sure of successful
implementation of a strategy - large or small. They're all interdependent, so if you fail to pay
proper attention to one of them, it can bring the others crashing down around you. Oh, and the
relative importance of each factor will vary over time, and you can't always tell how that's
changing. Like a lot of these models, there's a good dose of common sense in here, but the 7S
Framework is useful way of checking that you've covered all the bases. The Seven Factors
are:
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Fig 6. 7s Model
 Strategy A set of actions that you start with and must maintain
Structure How people and tasks / work are organised
Systems All the processes and information flows that link the organisation together
Style How managers behave
Staff How you develop managers (current and future)
Superordinate Goals Longer-term vision, and all that values stuff, that shapes the destiny of
the organisation
Skills Dominant attributes or capabilities that exist in the organisation

There's a lot more to the 7S framework of course, especially how you apply it in practice. It
may appear as an outmoded concept in today's environment of "constant change and
learning", but the basic principle that you've got to watch a lot of factors all the time as you
implement any strategy still applies. Just don't let the apparent rigidity of the framework
make you heavy on your feet.

For more about strategy and strategic management in general, look out "Strategic
Management" by Dess & Miller (McGraw Hill 1993). It's not a bedtime read, but is a useful
reference work of ideas and case studies. If you want more on the 7S model, read Richard
Pascale's subsequent "Managing on the Edge" (1990).
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 6.0 Marketing Strategy Analysis of NALCO

6.1 4P’S of NALCO

i) Products

 Calcined alumina.
 Alumina metal.
 Zeolite.
 Special products.
 Alumina hydrate.
 Rolled products.

ii) Pricing

The pricing strategy of NALCO is based on:

1) LME (London Metal Exchange). So, the price changes according to the changes in
the LME.
2) Demand of the( Al )market or demand of the customers.
3) Pressure from competitors. As Nalco also has some strong competitors , pricing is
done by keeping a keen view on the competitors.
Overall, the pricing strategy of Nalco generally updated at a monthly basis but it changes
according to the situation.

iii) Promotion
As the company’s present market is a buyers market, So its not required to spend money.
but some where as a global company it need some promotion, NALCO use to do some
small promotional activities, which we can see in form of CSR (Corporate Social
Responsibility) like organizing cricket matches, funding journals etc…

iv) Place

Under this segment we will consider about how company move it’s products from place
of production to place of consumption. For this NALCO has it’s stockyards almost all
around the country which makes its logistics more efficient. The current stockyard are
1. BADDI
2. Bangalore
3. Biwandi
4. Chennai (SY)
5. Faridabad
6. Jaipur
7. Kolkata
8. Silvassa
9. Vizag
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 6.2 BCG Growth-Share Matrix of Nalco

STAR QUSTION MARK

1) Billets
1) T.Ingots

CASH COW DOG

1) Aluminum sows 1) Rolled products
2) Special products
2) Calcined alumina
2) Zeolite
3) Alumina hydrate

Fig 7. BCG Growth-Share Matrix of Nalco

6.3 SWOT Analysis of Nalco

Strengths

1. It has a very rich bauxite mine.

2. Nalco is one of the lowest cost procedure in its segment .
3. It is one of the pioneer in the field of aluminium
4. It has a strong technical man power.
5. It uses one of the fully integrated operations
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6. Strong cash reserves with no debt

7. Robust volume growth on back of recent expansion plans.
8. Being a Navratna company it has a very strong good will.
 Weakness

1. Being a public sector company , it has a slow decision making process compare to any
private sectors.
2. Shortage in coal linkages has lead to higher share of imported coal at relatively much
higher price.
3. The conservative policy like debt-free company during an major bull run also may
hampered the Growth in long run.
4. It’s product mix basically targeting to primary product segments.
5. As Nalco is now in 30th year it needs new technologies to compete.

Opportunities

1. Despite current crisis, India is likely to remain second fastest growing economy
2. Government thrust on infrastructure would also continue albeit at modest pace
3. Automobile, consumer durables and engineering sectors are at very nascent stage
compare to global scale
4. Low per capita housing and booming retail industry would drive construction demand
5. Low per capita aluminum consumption compare with other countries offers a higher
growth
6. Rich Geological Resource base
7. Growing Skilled and Technical Human Capital.

Threats
1. Instability in LME aluminum price (currently at five year low) will affect margin
badly
2. Significant disruption in demand in developed countries from key consumer segment
3. Competition from scrap imports and very high threat from substitute materials
particular plastics
4. Progressive reduction in aluminum import tariffs
5. Bureaucratic nature of Government - Socio-Political interventions (in leasing mines)
6. Deficit infrastructure

6.4 7s Strategy Model Describing (Nalco)

1. Structure: How people and tasks / work are organized. NALCO is one of the well
organized organization. The role of every employee is very clear to them. They are
aware of the performance expected from them, So according to that they perform.
2. Strategy: A set of plan for the future actions that you start with and must maintain.
Strategy applied by NALCO is basically a long term strategy.
3. System: A set of actions that is according to the strategy. In system we will consider
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the flow of information. Here the flow of information is from top to bottom i.e. the
decision is taken at the upper level.
4. Style: How managers behave. As NALCO is one of the navaratna certified
organization , it is very simple to say the upper level employees are very much
cooperative to their subordinates, because of which they are today at this stage.
5. Staff: How you develop managers (current & future ). The staffing in NALCO is very
good every department is headed by different chief manager, who are really
 deserving , and further more they are again provided with junior managers who are
there to provide cooperation. So we can say the span of control is wide for the director
but it is very easy to handle because of this staffing.
6. Superordinate Goals: Long term vision , and all that values stuff that shapes the
destiny of the organization . Super ordinates goals in case of NALCO is same as that
of the mission of the organization.
7. Skills: Dominant attributes or capabilities that exist in the organization. As the
selection procedure of NALCO is very stringent, quality people are selected as
employees. Therefore NALCO has a good reservoir of skills.
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 7.0 DOMESTIC PROCEDURE OF NALCO,INDIA
7,1.PREAMBLE :

Nalco started sale of metal in domestic market from its smelter plant, Angul on Ex-works
basis during 1987-1988 Based on the MOU between the company and Ministry of mines,
the annual target is set for all products including metal . it is then bifurcated into export
& domestic sales target. this annual target is further broken down product wise into
monthly targets and subdivided into Regional targets . The targets are subject to change
based on overall global and domestic market dynamics.

7.2.ANNUAL/MONTHILY TARGET SETTING FOR DOMESTIC SALE :

With a view to achieve the target monthly meeting is held between marketing department,
smelter plant, smelter dispatch section and traffic at the end traffic at the end of the previous
month or beginning of the month to work out the suitable product mix on a month to month
basis. the movement plan of the both export & domestic metal by Railway Rakes from plant
to stockyards is worked out. Taking into consideration the month end stock at plant and
stockyards along with the expected availability of metal for domestic sale from the monthly
production ,the matter is discussed between the Regional offices and corporate Marketing
department for procuring the purchase order/financial arrangements of customers.

7.2.1 SALE ORDER BOOKING :

Nalcos product in the domestic market are open for purchase by any domestic
customers.
a. Direct enquiries from customer.
b. Sales conferences/customer meet,
c. Contracting buyers directly
d. Responding to tenders floated usually by PSU’s/Govt./State
Undertakings.

7.2.2 MODES OF PAYMENT:

I. Advance payment in form of DD/cheque/SBI FAST CASH system

,RIGS etc…

II. Sight/ Usance LCs

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 7.2.3 REVIEW OF PRICES,TERMS & CONDITIONS FOR SALES OF METAL
IN THE DOMESTIC MARKET FOR VARIOUS PRODUCTS ARE
GOVERNED THROUGH DELEGATION OF POWER :

a. Delegation of powers(pricing committee)

1. Executive Director (Marketing)

2. General Manager (Marketing)
3. Dy.General Manager (Marketing-Finance)
4. Dy General Manager (Marketing-Domestic)

b. Demand supply trend in domestic market, inventory holding ,LME

price trend and other factors with the all term & conditions.

7.2.4 DESPATCH INSTRUCTION:

Based on the purchase order of the customers & financials arrangements, corporate
domestic marketing papers Despatch Instruction-DI whose numbering is computer
controlled for despatches from Plant .the stock transfer DI’s to different stockyards are
also prepared based on the indents received from the respective regions.

7.2.5 DELIVERY INVOICE:

On receipt of DI from the domestic marketing of corporate office ,the dispatch
department at plant ,will prepare delivery invoice with computerized control
nos.,which will be used for removal of excisable goods from factory to
buyers/stockyards.

7.2.6 PACKING LIST-CUM-MATERIAL GATE PASS-CUM-DESPATCH

ADVICE

Packing list cum material gate pass cum Despatch Advice with computerized control
nos. is prepared by the dispatch departments ,smelter plant for each corresponding
Delivery invoice & accompanies the copies of delivery invoice.

7.2.7 LORRY RECEIPTS (LR)/RAILWAY RECEIPTS(RR):

Despatch Department, smelter plant obtains 2 copies of LR/RR (consignee copy and
consignor copy) as the case may be and the third copy is to be retained by the
transporter/Railway at source.

7.2.8 COMMERCIAL INVOICE:

Against all the delivery invoice issued to a particular customer in a day one
commercial invoice subject to a maximum of six (6) consignments can be prepared by
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Finance Department smelter Plant to facilitate easy documentation of material

delivered.

7.2.9 SALES FROM STOCKYARDS :

a. The sales from the stockyard takes place under the control of regional
offices/Branch offices
 b. Beside effecting sales from plant to meet the requirement of local
manufacturers’ /SSI customers, NALCO also moves metal to its various
stockyards for sale from stockyards.
c. For declaration of basic price for sale from stockyards ,the stockyard recovery
charges are added to the basic price ex-smelter plant as ruling on date of
removal of material to stockyard from smelter plant.
d. While removing goods from smelter plants for sales from stockyards ,Excise
duty is paid at smelter plant based price ex-smelter plant ,stockyard recovery
charges and applicable discounts ruling on date of removal of goods from
plant as per the statutory requirements.
e. Customer makes financial arrangements i.e. Advance payment by DD/SBI
FAST/ Cheque ,etc..or letter of credit with the Regional Offices for lifting
material from stockyards.
f. On receiving firm financial arrangements and other statutory documents
,metal is delivered to the customers from stockyards.
g. Respective stockyards under the Regional Offices keep a detailed record of
opening stock, receipt ,sales and closing stock product wise.

7.2.10 “E 1” FORMS :

Buyers who sell in transit normally ask for E-1 forms. In such a case, the customer
has to submit the following documents to the respective Regional Offices for the
verification and following it to corporate office for further checking & issuance of E-
1 forms.

1. Sales Tax Registration certificate copy of the customer specifying resale of

aluminium metal/non-ferrous metal/aluminium products as the case may be.
2. Duty endorsed Lorry Receipts.
3. Copy of the C-form submitted
4. Certificate from the customer confirming the sale of metal in transit under
section 6(2) of CST Act 1956.
5. Invoice copy of the customers(to the third party)
6. Any other statutory documents required from time to time.

7.2.11 REFUNDS:

Quite often, the customers after completion of monthly transactions ask for refunds
for left over amount which are normally routed through Regional offices. On getting
recommendations from Regional office the same is forwarded by corporate marketing
section to marketing finance incorporating the necessary details based on which
refunds may be effected to the customers through Regional Offices. In case of Orissa
based buyers and some Govt./State undertakings/PSUs who directly deal with
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corporate marketing, the refund advice advice is processed from corporate marketing
finance. After checking the correctness of the refund amount, Marketing Finance
makes the refund.
 7.2.12 FOLLOW UP WITH THE CUSTOMERS:
A constant interaction is maintained by corporate marketing personnel as well as
Regional Marketing personnel with the customer to book orders.Besides,through
interaction a reciprocation system is established in which NALCO personnel give
details of metal position, dispatch details, amendments to L/C required, change in the
product mix ,etc.from time to time to the customers.

MOU SCHEME FOR FINANCIAL YEAR 2011-12 FOR SALE OF

ALUMINIUM METAL IN DOMESTIC MARKET
:
MEMORANDUM OF UNDERSTANDING 2011-12

1. This memorandum of understanding (MOU) is between M/s…………………………

having its registered office at………………………………………….(first part) and M/s National
Aluminium Company Limited having its registered office at Plot no.P/1, Nayapalli,
Bhubaneswar-751061 and regional office at …………………(second part) and is being signed
on………………………………(date).

This memorandum of understanding will be governed broadly by the following terms and
conditions:

2. M/s……………….. has requested for an Annual MOU quantity of ______MT as per

following quarterly break-up. However after review of availability of metal M/s. NALCO
has agreed for _______ MT of metal for the period 01-04-2011 to 31-03.2012 as per
following quarterly break-up.

3.MOU PERIOD, PRODUCTS & QUANTITY :

(a) PERIOD: Financial Year 2011-12 (from 01.04.2011 to 31.03.2012).

(b) PRODUCTS COVERED: Aluminium Ingots, T. Ingots, Sows, Billets, Wire rods, Cast
Strips and Rolled Products or any other Aluminium Products.

(c) Last date for signing MOU:

For Annual MOU Scheme: Customers desirous of signing MOU for the whole year shall
sign preferably before 15th April 2011.

For Quarterly MOU Scheme : Customers desirous of signing MOU for any quarter other
than 1st quarter and consecutively from that quarter shall sign preferably before 15 th of
the preceding month prior

to beginning of that (those) quarter(s). For 1st quarter, the last date of signing would be
20th April’2011

(d) ANNUAL MOU Scheme:

(i) Customers desirous of signing MOU for the whole year shall be covered under this
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scheme. Their signed annual MOU quantity shall be total Annual MOU Quantity agreed by
NALCO for FY 2011-12. Minimum Annual MOU quantity shall be 96 MT.

(ii) Quarterly MOU qty: Normally quarterly MOU Quantity shall be Annual MOU quantity
divided by 4 (Four) for the quarters defined under sl. no. 2. However,customers signing
MOU for the whole year are also allowed for signing differential quarterly quantities
within the range of 20% to 30% of Annual signed quantity.
 (iii) Monthly MOU quantity: Quarterly MOU quantity as mentioned above at sl. no.
3(d) (ii) divided by 3(three).

(iv) Customers who sign Annual MOU quantity for the whole year; but do not qualify for
annual and loyalty reward by virtue of not meeting eligibility criteria, as per sl.no. 3[III-
A] therein may sign MOU afresh for any quarter and consecutively from that quarter.
Request from such customers should reach the respective regional offices by 5th of the
month following the quarter when they get disqualified. They will be entitled to
respective quarterly/monthly benefit afresh but will not be eligible to get the specific
benefits available for Annual MOU such as TATKAL SCHEME, Annual Rewards & Loyalty
Rewards.

(v) The MOU quantities signed by the customers shall be subject to metal availability.
Those customers interested in signing MOU for the whole year shall be preferred in
signing MOU quantities over other MOU customers

[e] QUARTERLY MOU Scheme:

(i) Customers desirous of signing Quarterly MOU for any one quarter/any two
consecutive quarters/any three consecutive quarters shall be covered under this scheme.
Minimum MOU quantity for a quarter shall be 24 MT. Their signed MOU quantity for any
one quarter/any two consecutive quarters/any three consecutive quarters shall be total
MOU quantity agreed by NALCO considering the metal availability.

(ii) Quarterly MOU qty: Total signed MOU quantity equally divided into one quarter/ two
quarters/ three quarters, as the case may be.

(iii) Monthly MOU qty : Quarterly MOU quantity as mentioned above at sl.no.3(e) (ii)
divided by 3(three) for a particular quarter

Despatch Priority: MOU Customers:

Considering successful MOU customer’s DI issuance date as 1st day incase their turn
does not come for dispatch on the 3rd day, then the priority would be in terms of 50% of
such DI quantity
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 8.0 NALCO's Standard Terms & Conditions Of Sale Format
Plant
All orders are accepted subject to NATIONAL ALUMINIUM COMPANY
LIMITED's (herein- after reoffered to as seller) standard conditions of sale given
below. Unless expressly accepted in writing, any qualification to these conditions in a
customer's (hereinafter reoffered to as Buyer) order to anything contrary to or
inconsistent with any of these conditions, must be deemed to be and will be treated as
inapplicable and of no effect.

8.1 PRICE :

1.1 The prices and other charges for the material shown are ex-factory at NALCO
NAGAR prevailing at present. Stockyard expenses will be extra in case of sale from
Stockyard. The price are subject to alteration without notice. All material will be
invoiced at the seller's prices ruling on date of despatch irrespective of the date of
booking or financial arrangements made.

8.1.1 Increase in price due to Government control or action shall be to buyer's

account.

8.2 MODE OF PAYMENT/ FINANCIAL ARRANGEMENT:

8.2.1 Payment to be made in advance by demand draft / pay order for full value of
mate- rial including all taxes (i.e. Excise sales tax etc as application) The same should
be drawn in favour of NATIONAL ALUMUNIUM COMPANY LIMITED and should
be on a schedule bank in Bhubaneswar or at any other places where our zonal offices
are located. Nalco shall separately submit challan /bills for deliveries made against the
dispatch instruction covering the offer. The advances paid by buyers will immediately
arrange balance pay- ment on demand.

8.2.2 Besides the above, supplies shall also be effected against firm financial
arrangement made by the seller in the form of sight L/C and Usance L/C in a formal
acceptable by seller. The beneficiary of the L/C shall be National Aluminum Company
Ltd , NALCO BHAWAN, P/1 Nayapalli Bhubaneswar ,751013, and the advising
bank shall be State Bank Of India, Nalco Corporation Office Bhubaneswar-751013
Whether arising dir- ectly or indirectly because of delay in delivery nor shall any delay
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/cancellation in deliv- ery , entitle the buyer to refuse to accept any material.

8.2.3 Any terms of Payment agreed to the contrary are valid when specifically indicted
in the enquiry response form by Seller.
 II.EXCISE DUTY, SALES TAX, & OTHER TAXES & LEVIES:

a) Excise duty shall be charged at the rate as prevailing on the date of despatch. Any
variation in the rate due to governmental action shall be to Buyer's account.

b) Sales Tax: Shall be charged at the rates as may be applicable at the time of actual
despatch/delivery of materials. The Seller's sales tax registration numbers are as under:

i) Central Sales Tax(CST) : BHC 1113, Dtd.16.09.1981

ii) Orissa Sales Tax (OST) : DL 1680, Dtd. 20.05.1982

c) Other taxes and levies: As imposed by Central or Local Government or any other
public authority shall be to the Buyer's account.

d) Entry Tax and Octroi: As legally applicable at the point of delivery of materials is to
the Buyer's account.

III. DELIVERY :

1. Orders are accepted and executed subject to "Force Majeure" circumstances

including Acts of God in the events of stoppage of work in any establishment of the
sellers during the delivery period owing to war, riot,strikes, lock-outs. Trade disputes,
breakdowns, fire, tempest, Government Orders, restrictions imposed by the Govt. of
India, Government decree, shortage of raw-materials and/or any causes beyond the
control of the seller or in the event of any stoppage of Railways or other carriers,
deliveries may be postponed or partially or wholly cancelled by the Seller. The Seller
will not be liable for any damages or compensation on this account or disruptions.
This is without prejudice to the Seller's right to recover money owing to the Seller in
respect of deliveries made prior to the commencement of such contigencies.

2. Liquidated Damages clause is not acceptable to seller.

3. Any time or date named by the Seller for delivery is given and intended only as an
estimate. The Seller shall not be liable to make good any damage, whether arising
directly or indirectly because of delay in delivery, entitle the buyer to refuse to accept
any material.
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4 .the seller has the right to supply ten percent more or less than the quality ordered
and price payable by the buyer being adjusted accordingly to the quality actually
supplied.
 5. Goods (returned to the seller within 30 days from the date of dispatch from the
seller ‘s factory) and accepted by the seller as defective will be either replaced as
originally ordered or full credit shall be allowed for such portion, but shall not form
the subject of any claim on account of work done upon the goods, transport CST, loss
of profits or any other claim suffered through resale or any other loss damage or
expenses whatso- ever. No claim for replacement of material on the ground of quality
will be entertained unless made within 14 days of receipt of such material. It may be
noted that where replacement is made the same shall be done on the prevailing rates of
prices statutory duties and differential, if any and shall be to the buyer’s account.

6 . Each delivery made against an order shall be deemed to be completed and separate
for all-purpose.

7. If after goods are ready for delivery or dispatch, the buyer do not take delivery
within the stipulated time, the cost of shortage, demurrage and insurance pending
dispatch or delivery shall be to the buyer’s account.

IV. CANCELLATION/SUSPENSION /MODIFICATION OF ORDER:

No cancellation, suspension or modification of orders by the buyers can be accepted

unless special circumstances exists, where the seller’s prior agreement in writing is gi-
ven and on the express condition that full payment will be made for all work done or
expenses incurred prior to our acceptance or cancellation or suspension .The seller’s
decision as to such charges shall be final and binding on the buyers.

V. INSPECTION:
Testing and inspection when mutually agreed between seller and buyers or his agents
shall be at the seller’s work and seller’s decision shall be the final.
1. No guarantee, express or implied is given that the material. Supplied is suitable for
use under any specific condition or for any specific purpose although such
condition or such purpose may be known to the seller nor is any guarantee given as
to the life or wear of the materials.All materials will conform to the seller's
standard manufact- uring tolerance.
b) The contract shall govern and construe according to the laws in India.

VI.PAYMENT-TERMS
Page64

1.Term of payment as indicated is binding on the Buyer. Title of goods shall remain with the
Seller untill full payment is received from the Buyer on account of goods sold.

2. Should default be made by the Buyer in paying any sum due under any order as and when
it becomes due, the Seller shall have the right either to suspend all further deliveries as
 regards the order in respect of which the default occurred or any other order untill the default
be made good or (and notwithstanding that the Seller may have exercised the right to suspend
all further delivery) to cancell the orders so far as any further goods remain undelivered. The
seller shall also have the right to cancell any other order he may have in hand from the buyers
such right of cancellation being in addition to and not in substitution for all other rights and
remedies the seller may have against the buyer in consequence of the default.

3. The interest for the interest bearing credit period will be charged at NALCO's rate
prevailing on date of despatch.

4. If the Buyer shall default in or commit any breach of any of their obligations to the Seller
or if any distress of execution shall be levied upon the Buyer, his property or assets if the
Buyer shall make or offer to make an arrangement or composition with creditors, or commit
any act of bankruptcy or if any petition or receiving order in bank-
ruptcy shall be present or made against him, or if the Buyer shall be Limited Company and
any resolution or petition to wind up such Company's business shall be passed or presented or
if a Receiver of such Company's undertaking, property or assets or any part thereof shall be
appointed , the Seller shall have the right forthwith to determine any order then subsisting and
upon written notice of such determination being posted by him to Buyers last known address
any and every subsisting order shall be deemed to have been cancelled without to prejudice to
any claim or right the Seller might otherwise make or exercise.

5. The Buyer shall be held responsible for all expenses, loss, damages or any other expenses,
whatsoever incurred by the seller due to the failure on the part of the buyer to clear the
documents forwarded through bank or take delivery of the goods from the carriers or failure
to perform any of the terms of the orders.

VII.JURISDICTION/GOVERNINGLAWS:

All disputes arising out of the contract shall be subject to the exclusive jurisdiction of Courts
of Bhubaneswar, Orissa only. The contract shall govern and construe according to the laws in
India.

VIII. ARBITRATION

In case of any disputes or differences arising out of the contracts which cannot be res-
olved mutually between Nalco & Buyers is shall be referred to a sole Arbitrator to be
appointed by the CMD of NALCO. The CMD, NALCO shall communicate, cause to
be communicated, a panel of three names of persons. To BUYERS in this regards
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within thirty days of notice for Arbitration, for BUYER to select anyone of them to be
appoin- ted. As the Arbitrator. The Arbitrator shall be giving a reasoned and speaking
award. The award of the Arbitrator shall be binding on both the parties. The venue of
arbitration shall be at Bhubaneswar. In case of any vacancy another arbitration will be
 appointed in the same manner as above. The provision of the Indian arbitration act and
the Rules made thereunder shall apply to the proceedings.

9.0 PRICING PROCEDURE OF NALCO,INDIA

The pricing committee of Nalco(domestic),fix the price of all the products

according to the demand & supply of market, prevailing LME price, Exchange
rate, Inventory status of NALCO,Govt. Policy (Tax, Duty) along with all the
term & conditions of company.

CMD (Chairman-cum-Managing Director) is authorized to make appropriate

changes in the sale of the company’s products as and when necessary based on
the recommendation of pricing committee to be constituted by CMD consisting
of senior officers who would review the market situation periodically and put it
recommendations for approval.

CMD has constituted a pricing committee, consisting the following officer :

1. Executive Director (Marketing)
2. General Manager (Marketing)
3. Dy.General Manager (Marketing-Finance)
4. Dy General Manager (Marketing-Domestic)

Demand supply trend in domestic market, inventory holding ,LME price trend and
other factors with the all term & conditions. Based on the approval of Chairman-
cum-Managing Director, the price & term & conditions, is put up to board for its
kind information.the review is made by the committee generally at about 4 weeks
interval.

The pricing policy is applicable to all the customers.special considerations are some
times made for public sector undertakings (PSUs)/Govt./State Undertakings.In the
case of PSU units,whenever NALCO is asked to offer matching discount, the same
may be scrutinized dependingon the volume of order,the inventory holding,quantum
of discount requested for and the financial implications involved.The discount may
Cash discount,Flat discount,Special discounts and monthly graded quqntity discounts
are also offered to attract customers.

Price can be change in case of any abnormal change in market suitations,change in

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Govt.policy or any Internal problem occurred in the company..

10.0 DISTRIBUTION PROCEDURE AT NALCO (RAW MATERIAL & PRODUCT

DISTRIBUTED THROUGH CHANNEL’S IN NALCO IN FOLLOWING SYSTEMS.)
 Bauxite mined from

Panchamali hill at koraput.

Transportation through 14.6 km long cable belt.

Alumina refinery at Damanjodi.

Here bauxide ore converts to Alumina

Transportation

Through train

Aluminum smelting at Anugul

Here alumina converts into aluminum &

Alumina converted into ingot.rod,billet.

Transport through truck &

Railway.

Stockyards

Jaipur, Visakhapatnam, Banglore, Silvasa,

Bhiwandi, Kolkota

Transport through rail, truck

& ship

Sell the products

Both in domestic and export.

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 11.0. EXPORT PROCEDURE 0F NALCO:

NALCO,in 1981, as a public sector enterprise of the government of India, National

Aluminium Company (NALCO) is Asia’s largest integrated aluminium
complex,encompassing bauxite mining alumina refining, aluminium smelting and casting,
power generation, rail and port operations.

 Commissioned during 1985-87 under extremely difficult logistics of project

management that too without time or cost over-runs, Nalco has emerged to be a star
performer in
production and export of alumina and more significantly, in propelling self-sustained
growth.

 It is the first Indian company to be registered with the London Metal Exchange and
has ISO 9000-2001, ISO14001 and ISO 9001, certifications for all its units including
mines,alumina refinery, aluminium smelter and power plant. Nalco products are
exported to more than 30 countries.

EXPORT OF METAL :

Nalco started exports of Aluminum metal in September 1988.

 The company’s metal was registered with the London Metal Exchange (LME),London
in 1989.
 The company presently exports primary aluminum in the form of Ingots, Sows-
Ingots &.Billets.
 The Ingots and Sows that are exported are normally of LME grade i.e. conforming to
the specification: P1070A pct min, Fe.0.20 pct max and Si 0.10 pct max.
 Export of others products, such as Wire Rods ,Billets etc., have been done in the past
and could be considered in future depending on the market situation and availability
of products of required quality.
Nalco presently exports through the sea-ports in Kolkata,Paradip & Vishakhapatnam and
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through land to Bangladesh, All export are on FOB ST (Spout Trimmed) & CIF basis
(Custom,Insurance & Fright )
  REGISTRATION OF CUSTOMER
Registration of customer is done by NALCO in order to enable them to participate in the
limited Tenders floted from time to tme..such registration continues to be an ongoing process
for expantion on customer based.
1. Only overseas buyers having sound financial credentials,certified by their bank &
business credentionl & experiences in inter national trading are eligiable to apply for
registion.
2. The annual tern over of the buyers should not be less then USD 6.0 millions or
equivalent.
3. In case of menufacture i.e Direct & User,the above cratirea could be relexed
 ORDER BOOKING:
 Order booking acctivites of metal is done through the process of,
► LIMITED TENDERING
1.Based on thetarget, order booking position,metal availability LME price and prevelling
domestic market,proposal for floating the tender is iniciated and open approval by competent
authority,the tender is floated
2. LME cash settlement price of a quotational period(QP).the premium could very dependind
upon the market perception of bidder & could some time be also negative.the QP could be
month prior to the month of scheduled shipment or few days,depending on the shipment
schedule.The average LME case settlement price would unknown both to the buyers &
sellers.

►ONE-TO ONE CONTRACTS

One-one contract shall eithers be on LME links basics or on fixed price basics.
LME linked basics : price are computed by adding the premium or discount finalized
the contract,to the average LME case settlement price of a Quotional period.
Fixed price basics : Depending upon the market buoyancy inventories,holding & the
LME trends,contracts could be made at fix price by striking the price considering the
flachuating trend of LME with reference REUTERS LME screen price at that point of
time and date..
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►PARTICIPATION IN GLOBAL TENDERS

For participation of global tenders issued by Various overseas customer the department may
first study the tender requirement & obtained conformation from plant regarding
production/availability of required quantity & quality of the materials as per buyers sehedule.
  SALE ORDER:
► Material description
► Quantity
►Shipment schedule
► Delivery basis
► Price
► Mutational period ( in case of lame linked contracts )
► Payment terms
► Standard terms and conditions
► Name & addressee of advising/ negotiating ban
 DISPATCH INSTRUCTION
Based on the on going contract the matel planning,finalized during the monthly meeting
between corporate marketing & smelter production, and taking in to account metal movement
to different to different port,a dispatch instruction should be send to smelter dispatch during
the beginning of every month.
 LETTER OF CREDIT
The export of aluminium metal would be done against the irrevocable Letter of The Credit at
sight open by a first class international bank acceptable at NALCO having provision for TT
reimbursement with in two or three working days of receipt of tested message from the
negociating bank.
 RAKE DISPATCH DOCUMENTS :
[A] APPLICATION FOR REMOVAL OF EXCISABLE GOODS FOR EXPORT
(ARE-1 FORM)
[B] PACKING LIST

RESHEDULING : All possiable effort may be made both by the buyers and seller so that
the goods are sheet as per the schedule of contract.if due to any circumstance the seller
approaches the buyer for reseheduling of the cargo.
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 12,0 CUSTOMER SATISFACTION OF NALCO

The very success of any enterprise depends largely on its ability to satisfy and retain their
customers. Any business without a focus on customer satisfaction is at the mercy of the
market. Without loyal customers eventually a competitor will take away your customers and
your customer retention rate will decrease. A successful enterprise knows very well what the
key drivers of satisfaction are, the areas that will have the greatest impact in improving
customer’s overall perception of our service. Best practice companies also
monitor customer feedbacks over time and communicate a strong message about their
commitment to serve their customer. A s p e r t h e m a r k e t i n g c o n c e p t , a f i r m
can realize all its business goals by generating
c u s t o m e r satisfaction. The idea may sound somewhat utopian. In reality, it is an
eminently workable proposition.

The satisfaction is a function of perceived performance and expectations. If the performance

falls short of expectations , the customer is dissatisfied. If the performance matches the
expectations , the customer is satisfied. If the performance exceeds the expectations, the
customer is highly delighted. Many companies aim for high customer satisfaction, because
the customers who are just satisfied find it better to switch to other companies when a better
offer comes along. Those who are highly satisfied are much less ready to switch. High
satisfaction or delight creates an emotional bonding with the brand. The result is high
customer loyalty. Xerox’s senior management believes that a very satisfied or
delighted customer is worth ten times as much to the company as a satisfied customer. A
very satisfied customer is likely to stay with Xerox many more years and buy more than a
satisfied customer will.
Benefits of Measuring Customer Satisfaction

• Learning strategies for improving services

• Learning customer expectations

• Identifying common reasons for customer dissatisfaction

• Improving customer retention

• Making customers feel valued

• Uncovering missed opportunities to demonstrate your capacity to solve

problems
and win back customer’s confidence

• Improved competitive position

• Helping to decide where best to spend improvement dollars to make sure you
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spend it where it matters the most.

 Major Customers of NALCO ( Domestic)

NALCO plays a vital role in the Indian Aluminium industry. The Aluminium
producing capacity of the country has witnessed a quantum jump after the entry
of NALCO. Through its quality products it gets about 800 direct reputed customers
and some of them are cited below:

• JINDAL ALUMINIUM LTD

• NATIONAL SMALL INDUSTRIES CORPORATION

• HINDUSTAN SEALS LTD

• BAJAJ AUTO LTD

• GOETZE INDIA LTD

• TATA MOTORS LTD

• GANGA JAMUNA LTD

• HIREN ALUMINIUM LTD

• STERLITE INDUSTRIES LTD

• METAL POWER COMPANY LTD

• SUNDARAM CLAYTON LTD

• INDIA PISTONS LTD

• ORDNANCE FACTORY AMBAJHARI

• HINDUSTAN AERONAUTICS LTD

• BHILAI STEEL PLANT

• ROURKELA STEEL PLANT

• VISAKHAPATNAM STEEL PLANT

• BOKARO STEEL PLANT

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 Customer Satisfaction Strategy Overview

When we talk about customer service or satisfaction, we talk about creativity. It

allows us to handle or diffuse problems at hand or later on in the process of conducting
everyday business. We talk about how or rather what the organization has to do to gain not
only the sale but also the loyalty of the customer. He wants to know the pay of the
transaction both in the short and long term. We want to know what the customer
wants; we want to know if our customers are satisfied. Satisfaction of course means that what
we delivered to the customer met his / her approval. We want to know if the customer is
delighted and is willing to come back.
Measuring customer satisfaction is a sound business strategy because:

• It is expensive to win new customers and customer retention is critical for business success.

• It is less expensive to sell additional products and services to existing, satisfied customers.

• Problems encountered by customers negatively impact their loyalty; if we

disappoint them they may start looking for alternatives.

• The customer contact centre has significant impact on customer loyalty, and in many
businesses the call centre has more contact with the customer than any other part of the
business.

• Most customers will not take the initiative to complain; they will not tell you,
they will tell their friends and co-workers how good or bad you were.
• “Word of Mouth” is the best and the least expensive way of advertising and customers are
much more likely to tell others about negative experiences than positive experiences.

Tools For Tracking Customer Satisfaction Strategy

Customer satisfaction surveys:

Studies show that although customers are dissatisfied with one out of every four purchases,
less than five percent will complain. Most customers will buy less or switch suppliers.
Responsive companies measure customer satisfaction directly by including periodic surveys.
While collecting customer satisfaction data, it is also useful to ask additional question to
measure repurchase intention and to measure the likelihood or willingness to recommend the
company and brand to others.

Complaint & Suggestion System:

A customer-centered organization makes it easy for customers to register

suggestions and complaints .Some customer-centered companies establish hotlines with
toll free numbers. Companies are also using websites and e-mails for quick two-way
communication
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Ghost Shopping:
Companies can have people to pose as potential buyers to report on strong and weak points
experienced in buying the company’s and competitor’s products. These mystery shoppers can
even test how the the company’s sales personnel handle various situations.
 Customer Complaints

When you receive a customer complaint, you know exactly where you stand
with the customer. This is especially true if the organization broadly interprets “customer
complaints” as any negative feedback that the organization receives. Whether the complaint is
justified or not is irrelevant; perception becomes the customer’s reality. But trouble starts
when organizations rely on customer complaints as their jointly gauge of customer
perceptions. The weakness inherent in relying solely on complaints is two fold. First, many
dissatisfied customers simply do not bother to complain. They have decided
that it is not worth the time and effort for them to communicate the problem. In fact, they
might just decide that it is not worth the risk of placing another order. The organization might
lose a customer and not even under stand what went wrong. And it is much more expensive to
regain a customer that to retain one. Second, complaints, by definition provide only negative
feedback. An organization cannot understand the full range of customer perceptions based on
negative feedback alone. A system for gathering customer perceptions should present a
balanced picture of where the organization stands, which does not happen when customer
complaints are isolated from other aspects of customer relations. That being said, customer
complaints can be an effective part of an overall system for gathering data on customer
perceptions. The trick is to pair this method with at least one other, the combination of which
will give an organization a more accurate view of its status in customers’ minds. Two specific
types of complaints can be especially useful in maintaining an organization’s success repeat
complaints (eg. Complaints about the same product, for the same reason or from the same
customer) and complaints that pose significant risk to the organization. Analysis
of complaint data can identify these phenomena, and management can then take
appropriate action on the underlying issues. In these cases, the complaint system becomes a
critical survival barometer for the organization. When complaints are not promptly resolved,
frustrated customers seek redress in different agencies or at different parts or levels of the
same agency, resulting in duplicate effort and compounding costs. There are costs associated
with a poor complaint system and there are benefits associated with a good one. Studies
have shown that handling customer complaints well can be a critical part of a
turn around strategy. If a complaint is handled well, it sustains and strengthens customer
loyalty and the company’s image as a leader. It also tells the customer that the
company cares and can improve because of their contact. In government agencies, it
promotes public confidence in government services. Customer complaints strategies also
represent valuable information about recurrent problems. They can point the way to
understanding the root causes of customer problems.

Customer Satisfaction Index

Customer Satisfaction Indicator (CSI) is an indicator of customer satisfaction

on different aspects of p r o d u c t s a n d s e r v i c e s o f f e r e d b y N A L C O . T h i s
f e e d b a c k h e l p s N A L C O t o t a k e v a r i o u s c o r r e c t i v e measures to enhance
customer satisfaction level in order to retain send expand NALCO’s customer base.CSI of
each customer in each product category is arrived at by the following method

Initial Calculation of Weight age:

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Regional Offices and Corporate Marketing Department calculate the average

weight age of each value category / factor based on feedback received from
their respective segment of customers. The final average weight age for each
value category factor, product segment-wise is calculated by corporate marketing
department taking into consideration the weight age of each value category / factor calculated
by the zonal offices and corporate marketing department... The final average
weights is of different
 value categories / factor for various product segments are calculated
t h r o u g h f e e d b a c k f r o m t h e customers.

Determination Of CSI:
Feedback from customers is obtained on regular basis twice a year i.e. June /
July and December /January for the half year ending June and December. The
feedback form, analysis and review of CSI, rating obtained in respect of value
categories / factors are carried out by respective Regional Offices / Corporate Marketing.
Based on the finalized weight structure so arrived for each value category /
factor product wise and quality rating obtained from the customers for each
product, the CSI is computed for each customer in respect of each product.CSI of
each customer in each product category .(The ratings are in the scales of 1 to 10.)

CSI = ∑ (w * r) / ∑ (w*10)

Where,

w = weight of value categories / factors

r = rating of value categories / factors

Thus, CSI is expressed as fraction.

Respective in charge marketing of regions reviews the CSI and quality rating obtained from
the customer. If the index is found to be low , specific interaction is made with the concerned
customer. The concerned agencies and the plant personnel then take it up so that suitable
corrective action is taken to improve the same. T h e r e s p e c t i v e i n c h a r g e
marketing of regions give periodic feedback to the corporate
M a r k e t i n g regarding the CSI, rating of the value categories / factors,
corrective actions taken and the effect of the s a m e . C o r p o r a t e M a r k e t i n g
reviews the process on quarterly basis and provide feedback to
E D (Marketing ). ED ( Marketing ), thereafter, reviews the entire process on quarterly basis
and takes suitable corrective action for improving the effectiveness of the same .
Trend analysis, Histograms and other statistical analysis tools are used for analysis and
review, as necessary , from time to time.
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 13.0. Promotional procedure of NALCO,India :

Basically NALCO is not spending it’s money in Various Advertising & promotional activities, rather
it spends money for the development of people as well as the development of society.
Corpotate social responsibility of NALCO,India :

At Nalco, when we started our activities in Orissa 30 years ago, there was no such nomenclature like
Corporate Social Responsibility or CSR. All that we knew was our Moral Responsibility towards the
society.

But today, CSR has become a buzzword in the corporate world. More and more organizations are
waking up to this belated realization that beyond productivity and profitability, it is the social
accountability that determines their image.

Presently, even before the land is acquired and foundation-stone laid for a project, the company
launches its CSR activities in the area. It is presumed that on a solid CSR foundation, a strong
business empire can be built.

As a policy, Nalco has been allocating 1% of its net profit of the year for periphery development
activities of the succeeding year

Out of this allocable fund:

40% is for Damanjodi sector, where the company’s Mines & Refinery are located;

40% is for Angul sector, where the company’s Smelter & Power Plant are located;
and 20% is for other areas.

● Mobile medical units of Nalco visit peripheral villages in Angul and Damanjodi sectors and hold
health camps round the year, distributing free medicines.

● To foster scientific temper among rural students, Nalco takes them to Bhubaneswar and shows them
Pathani Samant Planetarium, Regional Museum of Natural History and Regional Science Centre

● Soon after the Super Cyclone in Orissa in the year 1999, Nalco has constructed 197 Primary
Schools-cum-Cyclone Shelters, under Prime Minister's National Relief Fund Scheme.

●1999: To National Defence Fund during Kargil War Rs.1.18 Cr

1999 For the victims of Super Cyclone in Orissa Rs.1.39 Cr

● 2001: To PM's National Relief Fund for the victims of Gujarat Earthquake Rs.1.70 Cr

● 2004: To Sports Authority of India towards training of Indian Contingent for Athens Olympics
Rs.1.00 Cr

● 2005: To PM's National Relief Fund for the victims of Tsunami Rs.2.44 Cr

● 2005: To PM's National Relief Fund for the victims of J&K Earthquake Rs.2.98 Cr

● 2008: To Chief Minister Relief Fund for the victims of Flood in Orissa Rs.5.00 Cr
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 14.0 Suggestions
No body in this world is perfect. Every body needs a feedback/suggestion for their
development.

NALCO is not an exception. So, in spite of many good things there are still areas where
Nalco could improve more. Like as a public sector it’s decision making process is a bit slow.
Here the organization should think to make it faster to compete with the competitors
especially from private sectors. Coal and electricity one of the must needed resources for the
organization. As coal is natural resources and now days its amount is decreasing so, company
should think about alternatives.where as NALCO has been already allocated Utkal-E coal
blog, Orissa, for its expansion unit. Even the project was allocated but still it not work
properly.if NALCO will work in this project as soon as possible it would have an extera
advantage to the company and company may add another new product.

Regarding electricity NALCO has signed a MOU with NTCIL (Nuclear Power Corporation
of India) for setting of Nuclear power plant in India. In joint venture for generating and
selling electric power, If this project will exercise in time then NALCO can play a pivotal role
in the power market.

NALCO’s market share it has good position in its primary segment but it should modify its
product mix which will help itself to gain a good position other than primary product
segment. As NALCO is a quite old organization, it needs some technological improvement
also.

As NALCO is a cash reserve organization so the company has the opportunity to expand its
business in different segments. As now the global economic recession has affected world
business very deeply. So, the company should be always prepared to face such kind of
satiation in future.

In our report we have seen almost all of the NALCO’s products are in cash cow segment,
accept T-ingots, here company has some areas of improvement and they should be observed
keenly.
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 15.0 Conclusion
Jules Verne, the father of modern science fiction, wrote "From Earth to the Moon", describing
a manned trip to the moon over 100 years before the Apollo landings. The protagonists' space
craft is to be fired from a giant gun and they decide there is one material which is ideally
suited to the application - aluminium: "This valuable metal possesses the whiteness of silver,
the indestructibility of gold, the tenacity of iron, the fusibility of copper, the lightness of
glass.

It is easily wrought, is very widely distributed, forming the base of most of the rocks, is three
times lighter than iron, and seems to have been created for the express purpose of furnishing
us with the material for our projectile."

Aluminium industry in general and NALCO in particular have very bright future. It is quite
sure that NALCO will prove it’s worth and cement a good position for itself in near future.
Proper identifications of new business opportunity in the international market can help it gain
it’s market share. It has already taken the required measures for this purpose. All its
expansion program are the vital examples of achieving its goal of securing a good status at
the international level.

Hence the strategy part of Nalco will defiantly play a vital role in its goal achieving process.
So, we hope this project will help full in order to increase its reputation as well as also to
fulfill the demands of the customers.
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 16.0.BIBLOGRAPHY

Kotler, P. (Year). Marketing Management. New Delhi: Publisher.

Marketing Management – Arun Sharma

Annual report of NALCO (Month, Year). Publisher.

Parichaya

www.google.co.in (Write the exact link with access date)

www.netmba.com

www.wikipedia.com

www.nalcoindia.com

www.moneycontrol.com
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 QUESTIONNAIRE

1. Rank the following strengths of Nalco as per your preference as per the
scale(Scale 1-5, 1=Most,5=Least)
A. Lost cost pricing
B. Fully integrated operation
C. Brand name
D. Technology
E. If any other
2. Whether being a public sector is strength for Nalco?
A. Yes B. No
3. Whether Nalco’s conservative policy like debt-free company is weakness
for the company?
A. Yes B. No

4. Nalco being a Govt. Undertaking does it have low flexibility in operation?

A. Yes B. No

5. Whether having a product mix consisting of only primary product a

weakness of Nalco?

A. Yes B. No

6. Does Nalco need new updated technology?

A. Yes B. No

7. Being mainly an export oriented company, does it create any strength or

weakness for Nalco? (Please Tick)

A. Strength

B. Weakness

8. Among the following points rank the best opportunity for Nalco?

A. India being the second fastest growing economic in the world even within
the global crisis provides opportunity for growth.

B. Rich geological reserve base of Bauxite in India

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C. Lower labor and cost of production in India.

D. Growing demand for Housing and booming Retail Sector.

E. Automobile Consumer durables & engineering sector are at very nascent

as per the global scale.
 F. If any Other.

(Rank them in a scale of 1-5, 1=Most seems to be…. 5= Least seems to be)

9. According to current scenario rank the most important threat for Nalco?

A. Growing competitors

B. Instability in Aluminum price

C. External Environment

D. Close substitute for aluminum

E. Reduction in Aluminum import tariff

10. Specify any other strength of Nalco -------------------------------

11. Could we visualize Nalco as the leader in its sector in the coming 10
years.

A. Yes B. No

If yes, please give at least 2 reasons.

1.

2.
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