Академический Документы
Профессиональный Документы
Культура Документы
SUBJECT
Marketing Strategy for
Hindustan Dorr-Oliver Ltd. (HE/PV)
Division
Prepared By:
HITESH MODI
Of
Place: Ahmedabad
---------------------- ----------------------
MBA MBA
CERTIFICATE
Milap Shah
( MBA )
Acknowledgement
First of all, I would like to thank my Project Guide Mr. Milap Shah for
his great help. As he is being my Project Coordinator he provided me very
necessary and important guidance and support until the submission of my
project.
Lastly, I would like to be very thankful to the whole HDOL Family for
their continuous effort in making the whole Project Activity very much
learning and Interesting.
(Hitesh Modi)
Developing niche products using the latest technology and supplying to new
industry verticals is an integral part of growth strategy. HDOL is working
towards gaining a strong foothold in catering to the Nuclear Energy, Oil & Gas
and Power sectors.
The Indian Capital Goods Industry has been witnessing a turnaround after a
prolonged period of recession. Capital goods manufacturers have been
experiencing excellent growth both in the top and bottom line. Their order
books are in a very healthy state which indicates the beginnings of an
investment cycle in India. This observation is also borne out by the upward
trend seen in the BSE Capital Goods Index. The capital goods industry needs
to now strategize its future in order to maintain this momentum.
HDOL has adopted three prolonged approach in its quest to remain a top
player in the global process plant equipment market. The initiatives centre on
capacity augmentation, capability build up and enhancing the product
portfolio through advanced technologies.
This study reveals that the whole industrys growth will be increased due to
investments in sectors like Oil & Gas, Petrochemicals, Power etc. and the
companies are performing well due the fact of increased technological
innovation and quality of the units. The stock price also got affected by the
same making the Capital Goods sector favourable for the investors.
Table of Contents
1 Introduction 1
1.1 Definition 2
1.2 Purpose of Strategy 3
1.3 Factors Influencing Marketing Strategy 4
1.4 Marketing Strategies And Target Customers 4
1.5 Types of Marketing Strategies 5
2 Organization Profile 8
2.1 About Hindustan Dorr-Oliver Ltd. 9
2.2 Business Divisions 11
2.3 Business Performance Translating Into Numbers 12
3 Portfolio of Products 13
3.1 Product Range 14
3.2 Pressure Vessels 15
3.3 Heat Exchangers 17
3.4 General Details 20
3.5 Manufacturing Process 22
4 Organizations as Buyer 25
4.1 Organizations Buying Center or Decision making unit 26
4.2 Organizations Buying Situations & Process 27
4.3 Organizational Factors 28
5 Literature Review 29
6 Research Methodology 35
7 Analysis and Interpretation for Hypothesis-1 (H1) 40
7.1 Analysis 41
7.1.1 Oil & Gas Sector 41
7.1.2 Petrochemicals Sector 47
7.1.3 Fertilizers Sector 50
7.1.4 Power Sector 52
Table of Contents
7.1.5 Sector wise Area of Interest 53
7.1.6 Business Sector wise contribution for order 54
booking during 2008-2009
7.2 Interpretation 55
8 Analysis and Interpretation for Hypothesis-2 (H2) 56
8.1 Analysis 57
8.1.1 Design & Engineering Capability 57
8.1.2 Key Facilities Installed in Workshop 58
8.1.3 SWOT Analysis 61
8.1.4 Assessment of Competition 62
8.1.5 Workshop facility comparision 64
8.1.6 Few Equipment manufactured by LEVEL-1 65
8.2 Interpretation 67
9 Analysis and Interpretation for Hypothesis-3 (H3) 68
9.1 Analysis 69
9.2 Interpretation 72
10 Recommendations & Conclusions 73
10.1 Major Findings & Conclusion 74
10.2 Road Map to Rs. 500 Crores 75
10.2.1 Marketing Strategy for year 2010-11 80
10.2.2 Marketing Strategy for year 2011-12 82
10.2.3 Marketing Strategy for year 2012-13 84
10.3 Limitations of the study 85
Bibliography 87
Chapter - 1
INTRODUCTION
1
1.1 Definition
The term strategy is drawn from the armed forces. It is a strategic plan
that interlocks all aspects of the corporate mission designed to overpower the
enemy or the competitor. An appropriate strategy is considered to be
essential to face adverse situations such as cut-throat competition.
2
1.2 Purpose of Strategy
A strategy is an operational tool to achieve the goals, and thus, the corporate
mission. Strategies do not attempt to outline exactly how the enterprise is to
accomplish its objectives. A company may view downsizing as a strategy in a
competitive market to render cost-effective services. Thus, strategy provides
a framework to guide thinking and action. Strategies are very much useful in
organizations for guiding, planning and control.
Strategy is a way of life both at the macro as well as micro levels for
everyone, whether it is a nation or a company. To win over in a given
complex situation, the organizations, even trans-nationals adopt strategies.
They make changes, if necessary, even to their global strategies. An
individual company may formulate its own strategy to bring out the desired
results. The eventual success of the organization depends upon strategy
formulation and implementation.
Some marketing strategies are created for the purpose of capturing a certain
segment of the market, but the majority of small business strategies are
more generic in nature. Even so, it's important to understand what your
strategy is trying to achieve.
3
1.3 FACTORS INFLUENCING MARKETING STRATEGY:
The results of analyzing market segments lead the marketer to consider one
of the following target marketing strategies.
4
Differentiated or Segmentation Marketing Marketers choosing this
5
1.5 TYPES OF MARKETING 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:
o Leader
o Challenger
o Follower
o Product differentiation
o 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
o Close followers
o Late followers
6
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:
o Horizontal integration
o Vertical integration
o Diversification
o Intensification
7
Chapter - 2
ORGANISATIONAL
PROFILE
8
2.1 About Hindustan Dorr-Oliver Ltd. (HDOL)
Hindustan Dorr-Oliver Limited has a new face. HDO is now a wholly owned
subsidiary of M/s. IVRCL Infrastructures and Projects Ltd., who are one of the
leaders in Indian infrastructure industry, having core business focus on total
Water Management including pumping, conveyance, treatment and
distribution, national highways, roads, buildings, hydro-electric projects,
power distribution, desalination, etc. IVRCL is also executing many projects
on BOOT basis for various Government Departments of India.
HDO has over decades established a unique track record and position as an
extremely dynamic, totally reliable and component-engineering company,
having a cutting edge of superior technologies to emerge among leading
process equipment and plant engineering companies in India.
Vision :
9
To achieve this, we will use the ENERGY of our people, develop and
implement LEADING EDGE technologies and draw on both to deliver
EFFECTIVE world-class solutions to our customers.
Mission :
To achieve this, we will ENERGISE our people with a positive culture that
rewards INNOVATION, breeds INITIATIVE and encourages INTELLIGENT risk
taking.
Head Office : Mumbai
Manufacturing Facility : Ahmedabad
Branch Offices :
o Delhi
o Chennai
o Kolkata
o Local site offices wherever projects are under execution
HDO Technologies Ltd. (subsidiary of HDOL), Bangaluru & Hyderabad
Key Facts :
Founded : 1974
Numbers of Employee : 1200
Revenue : Rs. 520.28 Crores
Headquarter : Mumbai, India
10
2.2 Business Divisions :
Business Divisions
11
2.4 Business Performance Translating Into Numbers
NET INCOME
600 520.28
500
400 308.63
Crores
300 213.59
Rs. in
200 143.87
86.78
100
Years
50
40 28
30
20
10
0 2005 2006 2007 2008
Years
12
Chapter - 3
PORTFOLIO OF PRDUCT
13
3.1 Product Range :
Pressure Vessels
Tanks, Spheres, Reactors, Columns, Storage Tanks
Heat Exchangers
Proprietary Equipment :
14
3.2 Pressure Vessels :
Vessels, tanks, and pipelines that carry, store, or receive fluids are called
pressure vessels. A pressure vessel is defined as a container with a pressure
differential between inside and outside. The inside pressure is usually higher
than the outside, except for some isolated situations. The fluid inside the
vessel may undergo a change in state as in the case of steam boilers, or may
combine with other reagents as in the case of a chemical reactor.
Pressure vessels are used in a number of industries; for example, the power
generation industry for fossil and nuclear power, the petrochemical industry
for storing and processing crude petroleum oil in tank farms as well as
storing gasoline in service stations, and the chemical industry (in chemical
reactors) to name but a few. Their use has expanded throughout the world.
Pressure vessels and tanks are, in fact, essential to the chemical, petroleum,
petrochemical and nuclear industries. It is in this class of equipment that the
reactions, separations, and storage of raw materials occur. Generally
speaking, pressurized equipment is required for a wide range of industrial
plant for storage and manufacturing purposes.
1
5
Major Pressure Vessels supplied by HDOL to various customers :
16
Client : Hindalco Industries Ltd.,
Renukoot, UP
Equipment : Pressure Decanter
Size : 6.5 m Dia. x 20 m Lg.
Weight : 160 MT
Fabricated at site
Heat exchangers transfer heat from a hot fluid to a colder fluid through the
combined mechanisms of conduction and forced convection. In most heat
exchangers, a metal wall separates the two fluids. All heat exchangers are
similar in their principle of operation; however, heat exchangers may differ in
the specific fluids that are used in the heat transfer process, the layout of the
metal tubes, and the configuration of the enclosure.
17
At present HDOL manufactures, Shell and Tube heat exchangers only.
However, HDOL opt for new products viz. Air cooled heat exchangers and
Plate & Frame heat exchangers.
In shell-and-tube heat exchangers, one fluid, known as the "tube side" fluid,
flows inside a set of parallel tubes known as the "tube bundle." These tubes
are enclosed within a metal shell. The other fluid, known as the "shell side"
fluid, flows inside the shell but over the outside of the tubes. Both the metal
shell and the tubes are pressurized, and they must withstand the specified
design pressures during the intended lifetime of the equipment.
18
Major Heat Exchangers supplied by HDOL to various customers :
Weight : 54 MT
Shell, Heads, Tubes, Tubesheets, Std. & Non Std. Forgings, Cover,
Baffles, Saddle/Skirt/Bracket Support, Process Connections etc.
Plates, Std. & Non Std. Forgings, Pipes, Fittings, Fastners, Gaskets etc.
CRITICAL PARAMETERS :
20
ACTUAL DIMENSIONS PERFORMED :
PRESSURE VESSELS / COLUMNS:
Diameter : 7100 mm
Height/Length : 36000 mm
Thickness : 92 mm
Weight : 160 MT
HEAT EXCHANGERS:
21
3.5 Manufacturing Process :
1) Pre-Order Activities :
a. Enquiry Generation
i. Marketing Efforts
ii. Registration for various products
iii. Enlistment in Vendor List (Client & Project wise)
b. Enquiry Receipt
i. Tenders
ii. Online tender download from e-tendering web-sites
iii. Non-Tender type enquiries (through e-mails, courier)
c. Reviewing Tender Documents
d. Discussion with various departments for specific requirements, if
any
e. Enquiry for raw materials for competitive pricing
f. Tender/Offer Submission (through Post/Courier/E-mail/e-tendering)
g. Order Receipt through Negotiation / L1 basis / Reverse Auction
2) Pre-Manufacturing Activities :
a. Receipt of Order
i. Contract Review w.r.t. pre-order commitments
ii. Issue of work order to various department with necessary
documents
iii. Kick off Meeting to discuss criticality of equipment, setting
up mile stone for various activities keeping in view of
delivery conditions as per order
b. Design and detail Engineering
22
c. Planning
i. Preparation of PERT and Barchart
ii. Production Plan based on 3 months planning keeping in view
of delivery date and availability of raw material
iii. Preparation of Workload chart for each fabrication shop and
machineries
d. Production Engineering.
i. Design of Jigs and Fixture
ii. Method improvement
iii. Tooling
iv. Automation and mechanization of various production related
activities
e. Welding Engineering
23
v. Provide material prices to proposal engineering during
estimate
3) Manufacturing Activities :
a. Micro Planning
24
Chapter - 4
ORGANIZATIONS AS BUYER
25
4.1 ORGANIZATIONS BUYING CENTER OR DECISION
MAKING UNIT
Influencers
(information &
evaluation criteria)
Initiators Deciders
(initiate purchase (formal decision
idea) making authority)
Gatekeepers
(control access)
Users Approvers
(use purchased (top management
material / services) approves
deciders choice)
Buyers
(purchase &
contractual
documentation
)
26
ORGANIZATIONAL BUYING ROLES
Initiators: Those who initiate the idea of purchase; may or may not be a part
of the organization
Deciders: Those who are formally authorized to make the final choice from
among the available alternatives
Buyers: Those who are formally authorized and directly responsible for
making the purchase and contractual documentation with the supplier
Users: Those who actually use the purchased material and services
BUYING SITUATIONS :
New product requires complex decisions, high involvement and lot of time
27
BUSINESS BUYING PROCESS :
Product Specification
Info
Supplier Search
Search/Evaln
Proposal Solicitation & Evaln
Supplier Selection
Purchase
Order & Purchase
Purchasing-
Internet Long-Term Performance Lean
Purchasing Contracts Evaluation & Production
Pro. Buyers
28
Chapter - 5
LITERATURE REVEIW
29
Opportunities in Oil & Gas (India Brand & Equity Foundation)
Growing energy demand of India and necessity to service that to ensure
economic growth is not compromised, presents business opportunities in the
complete value chain of oil and gas sector. Exploration for domestic
production growth, development of discovered fields, transportation of crude
oil, gas and products, refining to service the petroleum product domestic
demand and exports, retailing infrastructure; prospective blocks to
encourage all these sectors provide business and investment opportunities.
30
India is aiming to emerge as a refining hub even as global refining markets
have tightened with the closure of small refineries in North America and
Europe mainly due to challenges in investing in cleaner fuels and high
compliance costs. In addition, permits for Greenfield refineries are hard to
obtain in these countries due to environmental concerns. Therefore, capacity
addition is primarily coming from emerging economies like India, China and
some Middle Eastern countries. The Government of India has been providing
tax incentives and fiscal incentives to new refineries.
The process plant equipment industry has evolved primarily on the basis of
the requirement to set up core process industries in India after
Independence. The demand today is also from these process industries being
set up but the size of the plants have increased and are at times comparable,
or larger than global capacities.
The industry caters to a wide variety of process industries like oil & gas,
petroleum refining, petrochemicals, chemicals, fertilizer, pharmaceuticals,
metal industry, cement, paper, sugar, cryogenics, distilleries etc.
Today in India there are a few companies who have made a mark in the
export arena due to their manufacturing skills and quality. Today the
manufacturing facilities are equipped with modern machinery and are
producing very sophisticated equipment such as high pressure heat
31
exchangers, spiral heat exchangers, multiwall vessels, airfin coolers, multi-
tubular reactors etc.
3
2
manufacturing performance, and the systems, processes and measures used
in its evaluation.
Competitor's objectives
Competitor's assumptions
Competitor's strategy
Competitor's capabilities
3
3
Objectives and assumptions are what drive the competitor, and strategy and
capabilities are what the competitor is doing or is capable of doing. These
components can be depicted as shown in the following diagram:
Objectives Strategy
Competitor
Response Profile
Assumptions Resources
& Capabilities
34
Chapter - 6
RESEARCH
METHODOLOGY
35
This chapter describes the way in which the study is conducted in terms of
methods of data collection Analyzing, Interpreting and Reporting Results. It
also describes the motivation, scope and limitations of the study along with
the objective of the study.
36
2. To understand organization buying behavior
3. Marketing Strategies to be adopted for heavy engineering company
4. Importance of detailed competitive analysis to develop future business
plan
5. Importance of Correct product mix and New Product Development in
process plant equipment industry
6.5 Hypotheses
H1: Oil and Gas Sector is having better business prospectus than other
business sectors with current workshop facility.
H2: HDOL cannot become LEVEL-1 Company with current workshop facility.
37
6.6 Research Approach
Both qualitative to better define our research problem and get a deeper
insight into it and quantitative methods to produce data that can be
statistically analyzed and whose results can be expressed numerically were
used.
The research was also descriptive research i.e. to identify the cause of
something that is happening or something happened because of that cause.
The research will be a quantitative analytical research which will be
descriptive in nature.
38
The sampling technique used here is a non random sampling technique called
quota sampling i.e. the population is divided into subclasses and then picking
up the data non-randomly. In the present case, we have selected
Competitors as well as Business Sectors based on their revenue among the
groups. The company showing the highest revenue in their respective field is
taken.
Both primary and secondary data was collected. In Primary data collection,
HDOLs status of enquiries, order booking, interview of HDOL official are
evaluated. The secondary data was gathered through books, journals,
articles, web-sites of Ministry of Petroleum, BSE, NSE and various companies
website of different business sectors.
The analysis of the available data will be based on the tools and techniques
used in financial management and statistics. Mainly MS Office Excel Package
would to use to carry out the hypothesis testing and descriptive statistics.
The analysis will include the performance of the sample companies for last
five years.
The analysis will include both technical and fundamental analysis, which
includes comparison of annual results of companies from different business
sectors for selection of companies. We have also done simple competitive
analysis of competitors.
39
7
Chapter -
Analysis &
Interpretation for
Hypothesis 1 (H1)
40
Hypothesis 1 :
H1: Oil and Gas Sector is having better business prospectus than
other business sectors with current workshop facility.
7.1 Analysis :
India has ambitions to become the hub for petroleum products exports.
Demand for petroleum products in the Asia Pacific region is estimated to be
4
1
around 25 to 27 million barrels per day (1.2-1.3 billion tonnes per year) in
the year 2010. However, the refining capacity in the Asia Pacific region is
expected to increase from the current 21.9 million barrels per day (1.09
billion tonnes per year) to a maximum of 25 million barrels per day in the
year 2010 (Source : Industry Sources). The export potential coupled with the
additional capacity additions and new refineries provide a unique opportunity
for potential investors. The opportunity exists in the form of investment in
capacity additions to the existing refineries and forming consortium with
private and NOCs to set up new refineries.
Institutional Arrangements
Indian Oil
Petroleum Conservation
ONGC Videsh Ltd. (Refining & Marketing)
Research Association
(Overseas E&P)
IBP (Marketing)
Petro Fed
Oil India Ltd.
Chennai Petro (Refining)
Numaligarh Refinery
(Refining)
GAIL
Gas Transport & Petrochemicals
4
3
Exploration Status 1998-99 (3.14 million sq. km)
M o derate to Well
Une xplo re d
, 40%
P o o rly
Explo red
,
17%
Explo ratio n
Initiated, 27%
Source : DGH
Unexplo red
M o derate to Well
, 15%
Explo red, 20%
P o o rly
Explo red
,
Source : DGH
44
Outlook for the Refining Sector
India is aiming to emerge as a refining hub even as global refining markets
have tightened with the closure of small refineries in North America and
Europe mainly due to challenges in investing in cleaner fuels and high
compliance costs. In addition, permits for Greenfield refineries are hard to
obtain in these countries due to environmental concerns. Therefore, capacity
addition is primarily coming from emerging economies like India, China and
some Middle Eastern countries.
45
Refinery wise Capacity Addition during XI Plan New Projects
Public Sector
Sr.
No. Refinery MMTPA
1 Indian Oil Corporation Ltd., Haldia 1.5
2 Indian Oil Corporation Ltd., Panipat 3
3 Indian Oil Corporation Ltd., Paradip 15
4 Hindustan Petroleum Corporation Ltd., Mumbai 2.4
5 Hindustan Petroleum Corporation Ltd., Vizag 7.5
6 HPCL-Mittal Energy Ltd., Bhatinda 9
7 Bharat Oman Petroleum Ltd., Bina 6
8 Bharat Petroleum Corporation Ltd., Kochi 2
9 Chennai Petroleum Corporation Ltd., Chennai 1.7
10 Mangalore Refinery & Petrochemicals Ltd., Mangalore 5.31
11 Oil & Natural Gas Corporation Ltd., Tatipaka 0.08
SUB TOTAL (PSU) 53.49
Private Sector
12 Essar Oil Ltd., Vadinar 3.5
13 Nagarjuna Oil Corporation Ltd. (NOCL) 6
SUB TOTAL (PVT) 9.5
GRAND TOTAL 62.99
MMTA : Million Metric Tonnes per Annum
Source : MoPNG - Ministry of Petroleum & Natural Gas
250 235
200 177
Refining 149
Capacity 150 114.6 127 127.4 132.5
MMT
100
62.2
50
0 1998 2001 2004 2005 2006 2007 2009 2012
Year (Forecast)
46
7.1.2 Petrochemicals Sector :
47
The Petrochemical industry is seen to hold good growth potential in the
medium-term as domestic per capita consumption of petrochemical
derivatives is fraction of world levels, indicating significant potential for future
growth in India.
Demand growth in India is fuelled by several factors :
Higher GDP growth than global rates;
Higher presence of traditional materials leading to greater
opportunities for substitution and
Increased application development carried our by large players to fuel
downstream demand.
13%
State wise production of Gujarat
11% Maharash
tra
Petrochemicals West
Bengal
Other
Gujarat Hub of Petrochemicals States
15% 61%
Source : Ministry of Chemicals & Fertilizers
48
Major Customers in Petrochemicals Sector :
BASF
GNFC
NOCIL
49
7.1.3 Fertilizer Sector :
The Indian fertilizer industry has emerged as the fourth largest producer of
fertilizers in the world after China, USA and Russia. Nitrogenous and
phosphatic fertilizers are produced indigenously, while requests for potassic
fertilizers are met through imports.
5
0
Major Customers in Fertilizers Sector :
KRIBHCO Hazira
51
7.1.4 Power Sector :
India has been one of the fastest growing economies in emerging markets.
Indian economy has posted more than 9% growth for three years
consecutively and has seen a decade of more than 7% growth. One of the
key factors behind any growing country is the energy requirement and supply
in that country.
52
Major Customers in Power Sector :
NTPC BHEL
Thermax Ltd.
53
7.1.6 Business Segment wise contribution
for 2008-09
60%
25%
8%
2% 5%
20%
50%
8%
2%
20%
54
7.2 Interpretation :
Looking to growth pattern of various sectors discussed above, Oil & Gas
sector dominates others sectors. There are many big players like ONGC,
IOCL, HPCL, BPCL, RIL etc. Also, it should be noted that Exploration &
Refining supplies feed/raw material for other sectors like Naphtha to
Petrochemicals/Fertilizers/Power sectors and Natural Gas to Fertilizers/Power.
Further, existing refining capacity is 177.97 MMTPA and new projects are
coming with refining capacity of 62.99 MMTPA, means this sector is growing
by 64.6%, hence, it proves heavy investment in this sector. It is proved that
Oil & Gas sector is one the driving force of economy.
Looking to HDOL product range, it is clear that Oil & Gas Sector is full of
opportunities and we can supply variety of high value equipment. Analysis of
enquiry received and orders booked by HDOL also shows that Oil & Gas
Sector contributes more than other sectors.
Hence, the hypothesis that Oil and Gas Sector is having better business
prospectus than other business sectors with current workshop facility is
proved correct.
55
Chapter -7
Analysis &
Interpretation
for Hypothesis
2 (H2)
56
Hypothesis 2 :
8.1 Analysis :
Software
PVElite
Microprotol
HTRI
AutoCAD 2008
PD 5500
57
8.1.2 Key Facilities Installed in Workshop :
1 Heavy Duty Plate Bending 50/32 Thk. x 3000 Wide CS/SS Plate
Machine 110/65 Thk. x 3000 Wide CS/SS
nos.), 5 MT (2 nos.), 3 MT
58
Entrance View
th th
4 &5 Fabrication Shop
59
ORGANIZATION CHART
60
8.1.3 SWOT Analysis (HDOL)
Strengths Weaknesses
Part of a bigger infrastructure company
Insufficient enlistment with some
(IVRCL) PMC / LSTK / Clients / Consultants /
Key facilities and machineries available
Project Specific Vendor List
Experienced Manpower
Accreditation & Certifications
Past failures and insecure clientele
due to the same
SAP implemented
Weak past track record for
Good tie-up with suppliers for support higher metallurgy
Prime Location for Mfg.
Lack of high end technology in the
Network across the Country core product range
Full support from Management
Slow execution and high over head
Capability to carry out site jobs compared to same size / turn over
Companies
Facilities like dished end mfg. &
testing lab is not available
Unexplored Export Market
Opportunities Threats
Recession is over
Easy market entry for competition
New Projects in Oil & Gas Sector and
Stiff competition for low value items
Petrochemicals
Late action could leave company
Good Market rapport due to successful behind in new / emerging areas
and timely execution of orders
Loss of Key Staff
Heavy investments in Nuclear Power
Competition from Chinese &
Strategic long term collaboration with Korean Suppliers
(foreign) technology partners
Margin squeeze
Export Market
6
1
8.1.4 Assessment of Competition
GR Engineering,
Level 3 (Small capacity)
Novatech
62
LEVEL 1 COMPANIES : Companies are having high end technologies, skills,
facilities, technological tie-ups, strong proven track records. They are
normally interested in very large to large equipment, critical metallurgy, very
high value items.
6
3
8.1.5 Workshop facility comparison :
64
8.1.6 Few Equipments manufactured by LEVEL-1
companies :
Godrej & Boyce Mfg. Co. Ltd., Mumbai
HCGO (ULSD) REACTOR supplied to a
Refinery in USA
Weight (Kgs) : 665,000
Thickness : 153 + 5 = 158 mm
65
L&T Ltd., Powai & Hazira Works
Atmospheric Column:
Diameter - 6,800mm
T/T Length 59,800mm
Weight - 390 MT
Vacuum Column:
Diameter 10,000mm
T/T Length 52,450mm
Weight - 580 MT
66
8.2 Interpretation :
Lost order analysis also reveals that small and medium category suppliers
giving stiff competition and to secure order, HDOL has to squeeze margins.
SWOT analysis also indicates lots of scope of improvement to come out this
situation. To enjoy comfortable situation and exploit niche market, HDOL has
to raise its capabilities comparable to LEVEL-1 companies, where HDOL can
secure orders with good margins. Above analysis proves that HDOL cannot
become LEVEL-1 Company unless it expands his wings across every area
discussed.
Hence, the hypothesis that HDOL cannot become LEVEL-1 companies with
current workshop facility is proved correct.
6
7
9
Chapter -
Analysis &
Interpretation for
Hypothesis 3 (H3)
68
Hypothesis 3 :
9.1 Analysis :
69
COST DISTRIBUTION OF VARIOUS PARTS IN PERCENTAGE (%) :
Forgings 5% 22%
Hardware 3% 6%
Painting / Packing 2% 1%
70
KEY FACTS ABOUT HEAT EXCHANGERS:
If we compare Price v/s Weight (like Rs. / kg) then heat exchanger is
having high value compared to vessels
7
1
Interpretation :
HDOL is having all capabilities right from design to dispatch. It should also be
noted that market requirement of both the product is not controlled by us.
We can only choose market mix to be adopted depending capacity utilization.
If spare capacity is available, then opportunity for pressure vessels can be
materialized. Above analysis reveal many advantages of heat exchangers
which prove it superior to pressure vessels.
Heat Exchangers are having different kind of construction models, which can
make product mix rich. If we consider unit time period (say a year), then it is
sure that HDOL can manufacture more nos. of heat exchangers compared to
pressure vessels of similar weight. Price ranges for pressure vessels from
Rs.100/kg to Rs.125/kg and for heat exchanger from Rs.200/kg to Rs.
225/kg. So, above analysis proves that heat exchangers generate more
revenue than pressure vessels.
Hence, the hypothesis that Heat Exchangers are better than Pressure Vessels
in terms of profitability is proved correct.
72
10
Chapter -
Recommendations &
Conclusion
73
An attempt is made to identify the factors that influence Process Plant
Equipment manufacturers in terms of business opportunities from various
business sectors, future prospectus, product mix, high technology products
and awareness of technological developments in market. The major findings
of the study are listed below:
Looking to growth pattern of various sectors discussed, Oil & Gas sector
dominates others sectors and this sector is growing by 64.6%, hence, it
proves heavy investment in this sector. Looking to HDOL product range, it is
proved that Oil & Gas Sector is full of opportunities and we can supply variety
of high value equipment, hence, it is having better business prospectus than
other sectors. Petrochemicals Sector is also emerging sector with few new
projects.
HDOL management aims to compete with LEVEL-1 companies for critical high
value equipment. To reach at LEVEL-1, improvement and enhancement are
required in areas like technological tie-ups, machineries, skilled man power,
certifications and accreditations, proven track record, welding capabilities,
new workshop having facility jetty near by and penetration in export market.
Hence, it is proved that with current workshop facility, HDOL cannot become
LEVEL-1 company. There is huge requirement of heat exchangers and
pressure vessels in oil & gas sector globally. There are huge oil refineries in
gulf countries, so efforts are required for market penetration.
7
4
Better product mix is always necessary for overall growth of the company.
Though market requirements are not governed by us, efforts must be made
to tap business opportunities for heat exchangers. Heat exchangers are
having many plus points; hence, it is having good profitability compared to
Pressure Vessels.
10.2 Recommendations :
Road map to Rs. 500 Crores turn over includes general marketing strategy,
market research, future prospectus and 3 years Marketing Strategy.
Vendor Registration
A total support and access to client through out the execution and
make them feel special
75
Present Market Scenario :-
Recession is over
All related project which went on hold during recession have resumed
and peaking up speed
As per 11th plan Investment of Rs. 1,00,000 Cr. per year has been
planned on power plant.
Investment of Rs. 1,50,000 Cr. has been planned in solar power plant
avenue.
Indian process plants are 15 year old and hence replacement market is
also significant.
76
Upcoming Projects for next 5 years in India
Refineries Petrochemical Complexes
Kakinada Refinery,
Kakinada BORL, Bina
(Petrochemical
Essar Oil Refinery, Complex)
Jamnagar BCPL, Assam
Fertilizer Plants Oil & Gas Sector
Power Plant
NTPC
77
Solar Power Plant
RIL
Electrotherm, Ahmedabad
Clinton Foundation
KNPC, Kuwait
Petrobrass, Brazil
Petrochemical Complex
78
Product wise Potential :
79
10.2.1 Marketing Strategy for year 2010-11 :
Equipment for Solar Power Plant (Low & Medium Pressure
Equipment)
Description Investment
in Rs. Lac
80
Shop Floor Area (Bay with 200MT Capacity). In Process
Dedicated Shop for SS fabrication. 2
Welding Expert and Metallurgist. 5
Training of employees. 5
Higher Thickness Plate Rolling Machine Received
TOTAL 787
Result Expected:
Price advantage as competition with few big names of industry.
Present shop floor capacity is 850 MT/Month will enhanced to 1500
MT/Month.
Higher return in Rs./MT due to higher metallurgy.
Offer to order conversion ratio of 15 % (present rate) will improve.
81
10.2.2 Marketing Strategy for year 2011-12
Equipment with Exotic Metallurgy (i. e. Incoloy, Inconel, Hast
Alloy)
Equipment Weighing higher than 300 MT for Site Fabrication
Total Potential of for this range of product: Rs. 4000 Cr.
ASME U3 Stamp. 50
Technical Tie up / Collaboration for Screw Plug Heat 200
82
Exchanger & Power Plant Equipment
Strip Cladding Facility. 15
Qualification for WOL with strip cladding. 05
Shop Floor Area (Bay with 250MT Capacity) In Process
Clean room facility for Exotic Metal. 25
150-200 MT capacity crane for site fabrication 1000
Plate rolling machine up to 80mm for site fabrication 300
TOTAL 2150
Result Expected:
Can be a sixth largest fabrication company of India
More Price advantage as competition with the biggest names of
industry
Present shop floor capacity is 850 MT/Month will enhanced to 2200
MT/Month
Higher return in Rs./MT due to higher metallurgy
Offer to order conversion ratio of 15 % (present rate) will further
improve
83
10.2.3 Marketing Strategy for year 2010-11 :
84
Competition for above said product range:
1. L & T Limited 6. HITACHI, Japan
2. BHEL 7. Borsig, Germany
3. ISGEC 8. Vijay Tank & Vessels (VTV)
4. Godrej & Boyce 9. Luigi Rasta, Italy
5. Mangiarotti, Italy 10.Korean Heat Transfer
Result Expected:
Can be a fourth largest fabrication company of India
Can handle super critical equipment
Further Price advantage as competition with the international industry
Present shop floor capacity is 850 MT/Month will enhance to 2200
MT/Month
Higher return in Rs./MT due to higher metallurgy
Offer to order conversion ratio of 15 % (present rate) will further
improve
Expected order booking will be Rs. 500 Cr
This study does not take companies who are the part of the
industry but are small & medium players.
85
This study does not cover many equipment of Capital Goods Sector.
Various analyses carried out from the basic data available from HDOL
which may not cover picture of whole industry.
Survey could not be done due to scatted locations of companies and
respondents.
86
BIBLIOGRAPHY
87
www.bharatpetroleum.com
www.ril.com
www.mrpl.co.in
www.hindustanpetroleum.com
www.nationalfertilizers.com
www.rcfltd.com
www.iffco.nic.in
www.kribhco.net
www.bseindia.com
www.moneycontrol.com
www.ntpc.co.in
www.gnfc.in
http://in.kpmg.com
www.asiatradehub.com
www.kpc.com
www.energy.gov (U.S. Department of Energy)
www.gail.nic.in
www.nrl.co.in
www.zuari-chambal.com
www.gsfclimited.com
www.deepakgroup.com
www.crisil.com
www.saudiaramco.com
www.bhel.com
88