"The company has been growing steadily and we have posted healthy growth in the last 4-5 years. We added new product lines and increased our capacities of existing products as per the market demand and trend," says Mr. P Srikrishna, MD, National Steel & Agro Industries Ltd.
How do you view the current trends shaping the roofing and cladding industry segment in the country?
Roofing demand has shifted from plain galvanized corrugated to colour coated sheets for their aesthetic looks & durability in semi urban and urban markets. In rural markets, due to increase in disposable income, demand for galvanized corrugated sheet is showing signs of improvement. With focus expected to shift back to infrastructure development after General Elections, we can expect a robust growth in roofing and cladding segment as well.
If you were to take a look at the past year, what would you say were the growth drivers for leading players like National Steel & Agro Industries Ltd (NSAIL)?
Last year was challenging due to slowdown in the economy. We managed to achieve growth in our top line by increasing operational efficiency, focusing on niche products, adding new product lines to our portfolio and spreading our reach to other global markets.
What would you say are the primary challenges that you are dealing with?
Prices of Hot Rolled steel & zinc which are our basic raw materials have seen lot of volatility in recent times. Further, frequent change in exchange rates adds to the pressure.
We have been able to ward this off by maintaining our premium in the market through supply of superior quality products and excellent services to our clients, though our premium does come under pressure due to availability of cheaper alternatives of substandard materials from other regional players .
Lack of infrastructure for exports is another big challenge faced by us. There are regular bottlenecks of port strikes & congestion resulting in disruption of exports cargo movement. Road network up to the port, though improved over the year, is still not up to the expected level. Better infrastructure that improves port connectivity through better roads would be extremely helpful to secondary steel manufacturers like us.
What has been the growth of NSAIL over the previous years?
The company has been growing steadily and we have posted healthy growth in the last 4-5 years. We added new product lines and increased our capacities of existing products as per the market demand and trend.
During the financial year 2013-14, all our steel verticals have shown growth. We have added a lot of export customers to our clientele apart from consolidating our business in the domestic segment.
Can you please throw some light on the capacities of your plant? Are there any plans to increase capacities or invest in a new plant?
We currently manufacture roughly about 400,000 MT of Plain & Coated materials in line with market demand for our products. We are coming up with a new Color Coated Line with an additional capacity of 80,000 MT per annum. We also have plans to introduce new product lines in 2015-16 and beyond based on market demand and trends.
Considering that India is a price sensitive market, how do you factor in the fluctuating prices of raw material into your overall pricing?
We try to mitigate fluctuation of raw material prices by getting into contracts with our long term customers. Similarly, we try to ensure MOU for at least 50% of our raw material requirement, which ensures continuity of raw material availability even during times of shortage. We also review our purchasing strategy from time to time, so as to have ideal and optimum raw material stock position at any given time.
Success in a very competitive market rests to a great extent on distribution. Would you throw light on your distribution?
On the domestic front, NSAIL has branches almost all over India with key account managers to handle different verticals. Our strength lies in continuity of supplies always in our key markets. We have catered to our main customers and key markets in domestic segment even when markets were more favorable overseas. This approach has helped us in developing a dedicated distribution channel of dealers. Due to focused approach, we have been successful in linking requirements up to retail levels with our production.
