SAIL targets 16% market share

Posted on 27 November 2017

Source: The Hindu

With an eye on grabbing a larger share of the market, Steel Authority of India Ltd. is putting in place a revamped marketing policy which rests on distributor-centric sales, increased share of value-added and customised steel in the product basket and a wider global footprint.

“For SAIL, the new marketing strategy, with customer-retention through enhanced customer experience as its mantra, is a way-forward to consolidate its market leadership,” Chairman P.K. Singh said.

The government’s ‘growth-oriented policies and its focus on augmenting infrastructure through improved rail, road and air connectivity, and investment in ports and inland waterways, as well as the Make-in-India drive’ all translate into increased demand, said SAIL officials.

Harnessing this opportunity through an aggressive customer-centric marketing policy, SAIL is aiming to increase its market share, by volume, from 14% to 16% by 2018-19.“With stabilisation of most of our new and modernised mills, we are diversifying our product basket with value-added and ready-to-use products. SAIL will introduce new and niche brands also,” Mr. Singh said after interacting with SAIL’s marketing team.

The marketing strategy would be focussed on increasing share of value-added steel in the basket from 37% now to 50% by next fiscal. It would also see the recast of the marketing model from the present dealership-based mode to a distributor-based model with focus on key-account management and increases in export volume and reach.

Domestic demand

SAIL’s present capacity of 17 million tonnes of saleable steel production will increase to 21.4 million tonnes on completion of its more than ₹60,000 crore modernisation programme by this fiscal.

“SAIL is aiming to seize the growing opportunities in the domestic steel market where demand is set to rise due to the thrust on infrastructure, housing and smart cities,” SAIL executive director R.K. Singhal said.

Products from the modernised facilities such as universal rail mill at Bhilai, new plate mill at Rourkela, structural mills and wire-rod mill at Burnpur and Durgapur and the cold-rolling mill at Bokaro will contribute to SAIL’s value-added product basket.

These products mainly target the construction sector including roads, bridges, tunnels, housing, railways, industrial usage like power transmission boilers, pipes and also niche segments like defence and space research, company officials said.

On the distributor-based marketing model , officials said that while SAIL already has a 2100-strong dealer network, it is planning to revamp the network into a two-tier distributor channel which will enable it to put in place a system of key account management for customer-satisfaction. It also sees this model as an enabler to help double its rural sales to one million by next fiscal.

On the export thrust, Mr. Singh has set a target of exporting 10% of the company’s saleable steel production. Company officials said that this would be done through increasing exports to the company’s existing markets in Bangladesh, Nepal, Sri Lanka , Europe, while exploring newer ones like Philippines and Indonesia.

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