BL reported that Essar Steel expects revenues of around INR 3,500 crore this fiscal from its retail outlets across the country and hopes to sell 3 million tonnes through this channel in two years.
In a presentation, the company said it planned to set up 5,000 retail outlets of various formats soon. Currently, it has over 300 outlets across the country. It said the retail segment caters to between 20% cent and 25% of the total steel demand in the country. One of the reasons for setting up the retail marts was to cater to the small and medium enterprises as well as small customers that, the company felt, had been largely ignored. These retail marts also sell steel in smaller pack sizes, apart from offering financing options to the customers.
Mr Vikram Amin ED sales & marketing of Essar Steel, at a press conference in Bangalore told that the retail marts would soon sell TMT bars, wires and wire rods. They would ensure transparency as well as quality of service. He said that “It is a win win situation for everybody, especially the SMEs. Customers will have direct access to the company’s products, without the intervention of any intermediaries and without any restrictive terms and conditions.”
A press statement from the company said Essar Steel plans to further expand its distribution network through Expressmarts and Expresspoints. These are dealer owned and operated outlets and offer Essar Hypermart products across all key steel consumption centers.
Mr Girish Rao CEO of Essar Hypermart said that "The retail business acts as a buffer for the company and has helped us mitigate the risk of the slowdown and grow even while the industry was down."
Mr Rao said that the company plans to set up 150 steel hypermarts, and 600 express mart outlets across India including tier II towns. The proposed retail outlets will be spread across the country including tier II towns. Currently, Essar has 75 hypermarts, 250 express marts and 1,000 touch points.
He also said that Essar plans to open 20 steel retail outlets in SAARC region and gulf countries to cater to the increasing steel demand from the small and medium enterprises segment. He told “We plan to build our overseas operations in these countries where the market is fairly similar over a period of time. Bangladesh, Nepal, Sri Lanka and Dubai are on the radar to start with. Currently, it operates three outlets in Indonesia.”
(Sourced from http://www.steelguru.com/news/index/2009/10/09/MTE1MjUz/Essar_Steel_on_retail_network_overdrive.html)
Friday, October 9, 2009
Essar Steel on retail network overdrive
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