Essar Steel is eying Rs 7,000 crore revenue from steel retailing in the hypermart format, says Ravi Singh, CEO, Essar Hypermart, in an interview with Megha Manchanda. Edited excerpts:
How is your business doing and what clientele does it cater to?
Essar Hypermart is a comprehensive approach to discover business at the bottom of the pyramid. The idea is to sell steel to the smallest consumer, like those who use 1.5 million tonnes a month. Hypermart also means the elimination of middlemen.
What revenue are you expecting from the hypermart business?
Essar Steel is eying Rs 7,000 crore revenue from steel retailing in the hypermart format, says Ravi Singh, CEO, Essar Hypermart, in an interview with Megha Manchanda. Edited excerpts:
How is your business doing and what clientele does it cater to?
Essar Hypermart is a comprehensive approach to discover business at the bottom of the pyramid. The idea is to sell steel to the smallest consumer, like those who use 1.5 million tonnes a month. Hypermart also means the elimination of middlemen.
What revenue are you expecting from the hypermart business?
We are expecting a revenue of Rs 7,000 crore this year.
What market share are you looking at?
We are looking to offer almost 25 per cent of what Essar Steel produces. In the Indian retail market, we are looking at about 20 per cent market share.
With infrastructure reviving and demand for steel starting to rise do we need a further extension of the minimum import price?
We need an extension because we have a neighbour (China) that produces over 800 million tonnes of steel and whose economy is going down. Its internal consumption cannot support 800 million tonnes of production and since it cannot consume what its produces, it has to export. One of the most attractive markets for China is India.
The new minimum import price list has been pruned. Is that bad news for the steel industry?
But there is anti-dumping duty and it is a long-term barrier. There were some gaps in the minimum import price, which have now been addressed. India needs to ensure its steel industry is protected because if you want manufacturing to grow steel will play a critical role. We need a vibrant steel industry that can manufacture products for the world, otherwise we will have to rely on imports.
What are Essar Steel’s borrowing plans for 2015-16?
We do not need fresh funds right now. Since we are not increasing capacity but increasing our capacity utilisation, more is needed for operational expenditure than capital expenditure. It is being generated more through internal accruals and cash flows than loans. We have a debt of Rs 30,000 crore.
Source:Business Standerd
What market share are you looking at?
We are looking to offer almost 25 per cent of what Essar Steel produces. In the Indian retail market, we are looking at about 20 per cent market share.
With infrastructure reviving and demand for steel starting to rise do we need a further extension of the minimum import price?
We need an extension because we have a neighbour (China) that produces over 800 million tonnes of steel and whose economy is going down. Its internal consumption cannot support 800 million tonnes of production and since it cannot consume what its produces, it has to export. One of the most attractive markets for China is India.
The new minimum import price list has been pruned. Is that bad news for the steel industry?
But there is anti-dumping duty and it is a long-term barrier. There were some gaps in the minimum import price, which have now been addressed. India needs to ensure its steel industry is protected because if you want manufacturing to grow steel will play a critical role. We need a vibrant steel industry that can manufacture products for the world, otherwise we will have to rely on imports.
What are Essar Steel’s borrowing plans for 2015-16?
We do not need fresh funds right now. Since we are not increasing capacity but increasing our capacity utilisation, more is needed for operational expenditure than capital expenditure. It is being generated more through internal accruals and cash flows than loans. We have a debt of Rs 30,000 crore.
Source:Business Standerd