PROJECT NAME

(FINANCIAL STRATEGY FOR ESTABLISHING A STEEL RETAIL DIVISON M/S. METAL CARE CENTER , SHARJAH )

SYNOPSIS
FOR DISSERTATION TO BE SUBMITTED BY THE END OF FALL 2011 TO SIKKIM MANIPAL UNIVERSITY, KARNATAKA, INDIA In partial fulfillment of the requirements for the award of the Degree of MBA in FINANCE Submitted by : SHYAM KUMAR PILLAI Roll No. 540911435

Under the guidance of: Mr. PRASAD GIRI &

MR. PATRICK DSOUZA MBA-Finance

Project synopsis
 

FINANCIAL STRATEGY FOR ESTABLISHING A STEEL RETAIL DIVISON -M/S. METAL CARE CENTER , DUBAI

6+<$0.80$53,//$, METAL CARE CENTER

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Project synopsis
 

PROJECT NAME

FINANCIAL STRATEGY FOR ESTABLISHING A STEEL RETAIL DIVISON IN U.A.E INTRODUCTION:

Steel Industry is a booming industry in the whole world. The increasing demand for it was mainly generated by the development projects that has been going on along the world, especially the infrastructural works and real estate projects that has been on the boom around the developing countries.

Steel and the recycled material are among the top products in the manufacturing sector of the world, especially in Asian countries that literally dominate the steel industry. India has recently started to become one of the fastest growing steel industries, and thus came to be considered as possible global steel hub, at an international level. The world steel industry has recently witnessed enormous growth and development, much due to the liberalization policies adopted worldwide.

The steel industry is a booming one, experiencing increased demand, especially as a result of development projects existing now in almost all sectors and services of industry and the economy. Among these projects is the worldwide ongoing attempt to improve infrastructure as well as real estate projects, which, for the past years have become a billion-dollar industry not only in highly developed countries, but also in developing countries.

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Project synopsis
 
The early 60s brought important changes and developments in the steel industry. With the doubling of steel consumption, the rate grew to 5.5 per cent, followed by a period of deceleration, which culminated in 1982. The decrease eventually slowed down and finally moved upward in the early 1990s. A sector of industry until recently dominated by the US, India is also coming at rapid pace, and its Indian steel companies have launched a real acquisition spree. Recently, India has been behind two major deals: The Mittal Steel (Holland), and the Tata Steel of India or TISCO, taking over the world's largest steel company, Arcelor Steel to become Arcelor-Mittal, while TISCO acquired the fifth biggest steel producer in the world, with highest stock price, Corus.

The steel industry benefits from a privileged and strong financial condition and position, since the demand of steel is only increasing. As a result, producers are working well over their operative capacity. Every passing day, the steel industry is becoming more and more of a competitive sector. The major demand for steel comes from industries such as the automobile industry, construction industry, infrastructure industries, oil and gas industry, as well as the container industry.

In order to minimize production cost while maximizing production figures, the innovations in the steel industry are visible in the cutting edge technologies used for production, like the thin-slab casting, or the production of steel using electric furnace, vacuum degassing, etc. Globally, in 2004 the steel industry turned into a billion tons industry. This growth depends solely on the consumption of steel in the developing countries.

The Steel Industry has enough potential to grow at a much accelerated pace in the coming future due to the continuity of the developmental projects around the world. This industry is at present working near its productive capacity which needs to be increased with increasing demand.

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Project synopsis
 

The UAE is one of the most promising steel markets in the GCC region with its production reaching to 1.7 Million Tons in the year 2006. Construction boom, cheap and reliable gas and energy supply, besides its geographical positioning are the major driving forces for the steel industry in the UAE. According to UAE Steel Industry Analysis, the latest market research report by RNCOS, it is expected that the industry will grow over 200% by 2012 from the current level.

COMPANY PROFILE:
Metal Care Center will be set up at the Hamariyah Free Zone, Sharjah. The Unit will be engaged in the following activities:

Stock & sales of various steel products: The Company as a unit will operate as a captive production unit for sheets and slit coils and will be in a position to consume about 10% of the steel turnover. Thus, adding value to the raw steel and increasing profitability. The other major focus areas will be the retail markets of neighboring GCC countries like Oman, Bahrain, Saudi, Kuwait, etc. There is also a lot of demand from local traders who are looking at a service centre for their specific requirements for Iran & Iraq. Service centre for cut to length & slitting of HRC, CRC & GI: MCC service center will also give the customer the advantage of taking the materials in any shape they prefer small cut sheets or standard cut sheets. MCC also imports prime over rolled and secondary cargo, cutting them and supplying to the local market. Leasing storage space and solution for steel users: MCC will offer infrastructure which will act as a one stop steel solutions for the steel traders to stock cargos in MCC yard and arrange for their loading, unloading and stocking etc. Since MCC also will also have a slitting and cutting facility it gives steel traders the service of processing the materials which none of the logistic companies can give.

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Project synopsis
 
Pipe and hollow section making: The Phase 2 of the company will see a diversification in to pipe and hollow section making.

STATEMENT OF THE PROBLEM:

This study focuses on the growing marketplace for steel sector in the UAE and thoroughly studies market trends, evolving markets, and growth prospects. It assesses the present status of the steel industry in the UAE and GCC region, and identifies investment opportunities. It also forecasts the future of the industry, which is based on a correlation between past market growth and growth of base drivers, such as economic performance of the country, long-term metal demand, competitive structure, and government rules and regulations. Thus null hypothesis (H0) for this study will be it is feasible to have a retail steel division in U.A.E with a minimum set up cost The accepting the alternate hypothesis (Ha) would be it is not feasible to set up a retail steel division in U.A.E

OBJECTIVES OF THE STUDY :

The purpose of this report is to examine and assess the organizations Financial strategy for setting up the retail steel division. An attempt to establish what level of understanding the organization has of feasibilty and set up process is carried out. In addition, the strategy and processes the organization is planning to implement will also be assessed. Finally,

recommendations will be made based on the information gathered, whilst taking into consideration the current economic climate and the availability of suitable resources. Objectives :

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y y y To examine and assess the financial strategy required for setting up a steel division To analyze the current financial strategy adopted by the company. To analyze the use any finanicial measures to lower the cost involved in the set up of the company. y To suggest some ways to improve the current financial practices.

SCOPE OF THE STUDY:

The study is directed towards financial strategy adopted for setting up a steel division by the promoters of Metal Care center. The report will mainly cover of the organizations financial strategy for setting up the retail steel division in UAE. However this report will also focus on other managerial decisions like all the steps required in setting up process, manpower planning etc. These steps will be discussed and analyzed in the project report later.

DATA COLLECTION:
The data will be collected through primary as well as secondary sources.

1. Primary Data:
The primary data comprises of information obtained directly from the promoters of the Metal Care Center.

2. Secondary Data:
The secondary data will be collected from the information through process study, annual reports of other companies enagaged in similar business, Public report and other printed materials.

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Project synopsis
 
Data will also be collected from journals, weekly magazines related to commerce and industry and business newspapers.

RESEARCH METHODOLOGY:
Research methodology is a way to systematically solve the research problem. It states the various steps that are generally adopted by a researcher in studying research problem along with the logic behind them. It includes the formulating of research problem, studying of literature, collecting the data, analyzing that data and making interpretations of that data. Research Design Research design is the conceptual structure within which research would be conducted. The function of the research design is to provide the collection of relevant evidence with minimum expenditure of efforts, time and money. The suitable design is the one that minimizes bias and maximizes the reliability of the data collected and analyzed.

Sample size A sample size of 30 out of a population of 100 will be drawn from the respondents belong to various departments which would include the promoters, other steel enterpreneurs, experienced employees of other steel divisions.

Sample tool The research tool being used will be Simple Random Sampling which involves drawing sample at random from the total population.Administered questionnaire consists of open ended and close ended questions.

Research Analysis

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Project synopsis
 
Research analysis is the computation of certain induces or measures along with searching patterns of relationship that exists among the data group. Statistical tools such as percentages, averages and trend analysis will be used. The information being gathered will be classified and represented in the form of tables so that the interpretation would be precise.

FINDINGS AND RECOMMENDATIONS:

The findings and necessary recommendations shall be submitted upon completing the study. However, the certain limitation was initially noticed during the study : 1. The Financial Strategy adopted may not be the best practice because the financial strategy will mainly depend upon the financial resources available with the promoters. 2. Time limitation can be another constraint.

CHAPTER SCHEMA: y y y y y y y CHAPTER I CHAPTER-II CHAPTER-III CHAPTER-IV CHAPTER-V ANNEXURES BIBLIOGRAPHY INTRODUCTION PROFILE OF METAL CARE CENTER FRAME WORK OF SET UP OF METAL CARE CENTER DATA ANALYSIS AND INTERPRETATION SUMMARY AND SUGGESTIONS

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Project synopsis
 

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