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Presentation on Indian Steel: Growth Scenario Presented by Girish V Rao. CEO- ESSAR Hypermart

Presentation on Indian Steel: Growth Scenario Presented by Girish V Rao. CEO- ESSAR Hypermart. GDP Growth Outlook: -. Economic activity which contributes to growth are: - Agriculture, forestry & fishing : - 8.9% Construction: - 8% Trade, Hotels, transport & communication: - 9.4%.

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Presentation on Indian Steel: Growth Scenario Presented by Girish V Rao. CEO- ESSAR Hypermart

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  1. Presentation on Indian Steel: Growth Scenario Presented by Girish V Rao. CEO- ESSAR Hypermart

  2. GDP Growth Outlook: - • Economic activity which contributes to growth are: - • Agriculture, forestry & fishing : - 8.9% • Construction: - 8% • Trade, Hotels, transport & communication: - 9.4%. • Mau fracturing :- 6% • Rest : - Service industry

  3. Infrastructure growth • With a growing economy infrastructure sector would require a lot of growth and the right amount of incentives. • Infrastructure will have a major role in beefing up its GDP growth. • Construction sector has grown at an annual rate of 12-15% from financial year 2004-2008 and is expected to rise at around 35% during 2009-2013. • Government continues to focus on infrastructure development as witnessed in the recent budget. • This sector is attracting more funds not only from the domestic space but also from the international arena, even in the form of PPP Source: Planning Commission GOI

  4. High growth in Auto: - • Passenger car division & Commercial vehicle space is driving growth • Expected passenger vehicle sales will reach 2.4 million units in 2012-13. Source: Automotive Mission Plan - GOI Source: Global insight Booz & Company analysis

  5. Consumer durables: - • The market for consumer durables is estimated at Rs. 300 billion and is expected to reach Rs. 500 billion by 2015. • The consumer durable sector contributes around 8 per cent in the Index of Industrial Production • The urban consumer durables market is growing at an annual rate of 9 to 12 per cent, the rural durables market is growing at 30 per cent annually. • Around 35 per cent of the total sales of consumer durable items come from rural and semi-urban markets, which will grow by 40 to 45 per cent in the near future Source: ASSOCHAM

  6. Factors leading to low consumption- Urban & Rural: • Availability of material. • Poor Infrastructure to reach out to the last mile customer led to substitution of product • Low intensity of Infrastructure Projects • Scope for large infra projects in the field of • Industrial infrastructure • Social Infrastructure • Opportunity in enhancing Availability, Affordability, Acceptability & Awareness • Low focus on Rural Markets • Inherent issues in rural market penetration • Cost of reaching is to high due to inferior infrastructure facilities. • Need for inclusion of extended stakeholders • Architects / Designers • Applicators and skilled manpower

  7. Favorable Demographics

  8. Substantial capacities planned: -

  9. Indian Steel outlook: - • With GDP growth at 8% steel is expected to grow by approx 10% Y-o-Y • Consumption of Steel is a lead indicator for the health of an economy. • Demand drivers of steel: Auto, Consumer Goods, Capital Goods, Infrastructure, Construction. • Per Capita Consumption of Steel: • All India - 47 Kgs • Rural consumption: 12.99 Kgs(JPC Report 2010) • Per Capita consumption is low in comparison to key industrial nations • Urgent need to increase the consumption for overall growth of the country

  10. Key challenges : -

  11. Factors leading to low consumption

  12. Initiative to increase steel : - Increase acceptability by providing:

  13. Increase Rural consumption • According to the JPC 2010 report rural steel consumption is Just 12.99KG. To increase this consumption we have identified following steps : - • Increase support to those sector which contribute to maximum rural consumption:- • Storage Trunk, Storage Drum/Bin: - • Imparting knowledge for usage of steel in this segment • Provide solutions for better storage solutions • Tractor/ Trolley: - • Provide ready to use products • Strong distribution channel to service the demand • Addition to house & New house construction: - • Improve aesthetics & improve life style

  14. Contd… • Provide kitting solution/ ready to use kits. • Ready to use kits by studying the industry segments more closely • Examples – Furniture industry, Storage segment, Tractor/ Trolley segment etc. • Provide training for fabrication, and also technical support in design etc. • Provide finance options • Educate & Explain life cycle value of steel • Government programs to encourage entrepreneurship in the sector

  15. Sahi Price: - Transparent pricing- Affordability 15

  16. Sahi Delivery- Accessibility • Locating nearer to the customer. • Availability of product of- the- shelf. • Smaller quantity of pack size • Door Delivery of product

  17. Planned Reach by FY’11 • 29% penetration into town >50K populations • .Planned to take up penetration to 58% and locating nearest to the customers. • Catering to the rural market demand. Source : - As per Censes Data .

  18. Hypermart Experience 18

  19. Expressmart Experience 19

  20. THANK YOU

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