We plan to double the production capacity - Satish Kumar Agarwal, CMD at Kamdhenu Limited
What is the total market size and current growth rate of TMT bars in India? What will be its likely growth rate in the next three years?|
The sale of construction materials including TMT bars are estimated to grow at a Compounded Annual Growth Rate (CAGR) of 6.18% in terms of volume. Currently, the size of the Indian construction industry is USD 2.8 billion. Recently the government has announced an early completion of 10 million rural houses by the end of 2018, ahead of 2018 deadline and 11.8 million urban houses by 2020 instead or 2022 deadline under the “Housing for All” initiative. This will require huge amount of TMT bars and we expect multifold growth in demand in the coming years. Bharat Mala Project, the second largest highway development includes a total investment of Rs.6,92,000 cores and the construction of 34,800 kms of new roads. This initiative is crucial to build connectivity and foster economic growth and we being in TMT segment, expect accelerated growth for us in the coming few years.
The government has taken various initiatives for the growth of infrastructure and real estate industry in India? How have you leveraged on the opportunities?
Government decision to boost infrastructure and real estate sector will give much needed boost to the demand for building materials including TMT Bars, Paints, etc. Acknowledging this, we are coming up with innovative new products that are not only affordable but also meets diverse customer requirements. These include earthquake resistant TMT Bars – Kamdhenu Nxt for quality conscious value seeking customers and Kamdhenu SS10000 for premium users. We have also added new products in our steel and paint product portfolio to emerge as one-stop shop to meet building materials requirement of our customers. This is besides strengthening our dealer and distributor network to leverage on the growth opportunities. Currently, Kamdhenu TMT Bar’ is the largest selling TMT Bar in India with brand sales turnover of Rs. 8,000 crores on the back of strong distribution network of more than 10,500 dealers and distributors for steel and paint business. We are also strengthening our manufacturing footprint pan India by adding new franchise manufacturing partners and increasing the ‘TMT Bar’ production capacity of existing franchise partners. Our plan is to double the production capacity from 2.5 million tonne (MT) per annum at present to 5 million MT per annum in next five years through franchisee route which investment should be made by the franchisee units.
Right now the steel industry is going through a consolidation phase. How is this benefitting / affecting the TMT bar industry?|
We are witnessing a major shift from the unorganized segment to the organized segment post implementation of GST. This is beneficial for the overall TMT Bar industry as it will provide organized players greater reach and scale besides providing access to technology and marketing support to un-organized sector players thereby making the industry competitive. It ultimately benefits customers who gains the most by getting top quality products at reasonable price.
It is been a year of introduction of GST in India. How has it benefitted / affected the TMT bars industry and your business in particular?
We looked at GST readiness as an opportunity to stand out from the rest of the industry which enabled us to embrace it better than other industry verticals. Ahead of rollout of GST, we constantly engaged with our dealers to address their concerns and help them prepare for this crucial tax reform. This helped us to ensure normal supplies during the first few months of GST implementation. Post GST, we are witnessing a major shift from the unorganized segment to the organized segment. There is also a lot of consolidation taking place in the industry from which we are benefiting a lot. We expect the demand for building materials from real estate and construction industry to remain robust in the current financial year as the impact of GST settles down further.
How are you addressing sustainability?
At Kamdhenu, we aim to positively impact the community at all levels and bring forth a transformation in the socio-economic as well as ecological constituents of the country’s rural and semi-urban land scape. Our efforts are directed towards making India inclusive and aspirational. We endeavor to help communities build a strong foundation for a better tomorrow by enabling them through the pillars of education, opportunities and empowerment. We provide education to underprivileged children through Kamdhenu Jeevandhara, our dedicated social wing. This besides organizing camps and motivational programs pan India for physically challenged. We have been working tirelessly for environmental protection and our ‘Green India’ drive is achieving noteworthy success in re-forestation drive. We engage with our 10,500 dealers and distributors in this endeavor on a consistent basis to plant saplings and nurture them till full growth. We are also contributing to the Swachh Bharat Abhiyan by promoting cleanliness at all our manufacturing facilities.
Which are the technologically superior TMT bars you have introduced in the market in the last two years?
There is growing recognition among individual home builders, real estate and infrastructure developers about the need for using superior products in the construction of various projects. Kamdhenu has developed latest tools and technology over the years to deliver a diverse product range that not only meet customer requirements but are also technologically advanced and affordable. Few years ago, we launched ‘Kamdhenu Nxt’, the next generation interlock steel in the market which is not only a more technologically advanced product but also deliver the best value for money to our value conscious and price sensitive customers. ‘Kamdhenu Nxt’ has the characteristic to make new engineered reinforcement structures and smart architectural concepts more robust by providing 2.5 times stronger concrete-steel interlock. Developed to address the need for steel bar that can form the strongest bond with concrete, Kamdhenu Nxt’s unique and critically designed double rib, fatigue strength and ductility makes it much superior to ordinary steel bars. The distinctive design of ‘Kamdhenu Nxt’ sets a benchmark of better interlock with concrete mix, giving more power to the structure. The two angular ribs on this steel bar amplify the interlock strength between steel and concrete thereby providing optimum security to structures that are subject to unexpected forces like seismic, dynamic impact, etc. This makes it suitable for concrete reinforced structures like bridges, flyovers, dams, thermal and hydel plants, industrial towers, skyline buildings, underground platforms. We are already offering Kamdhenu SS10000 which is a celebrated product among the premium users of double rib TMT bars. The blend of chemical and mechanical properties of this product is at par with national and international standards of quality like that of British Standard B500C.
How are you addressing the shortage of skilled manpower and talent crunch in TMT?|
At Kamdhenu, we recognize people as our primary source of competitiveness. We follow a people centric work culture to enable an open work environment and foster continuous improvement and development of employees. We have adopted structures that help us attract best talent and promote internal talent to take up bigger roles and responsibilities. Towards this, we leverage technology and focus on creating a continuously learning human resource base to unleash the potential of employees to help them meet their career aspirations and address talent crunch.
Dealers are a vital link for the growth of any company. Please tell us about your dealers’ network and the various retention schemes you offer?
Our channel partners and dealers have played key role in the success of Kamdhenu Group. During our 22 years of continuous growth, we have built a strong distribution network of more than 10,500 dealers and distributors. We treat our dealers as a member of Kamdhenu family and provide training, sales and marketing support to help them meet their business targets. We also share our success with our dealers at regular intervals through incentives besides recognizing and rewarding their performance to inspire them. Every year, we organize a celebrity studded event called “Target Ka Badshah” to encourage channel partners of Kamdhenu. During the event, we give away attractive prizes to winning channel partners in different categories.
In all probability the demand for TMT bar is expected to rise in the coming years. How are you gearing up for this opportunity?
We are bullish on future prospects for the country’s infrastructure sector and anticipate increase in demand of TMT bars in the coming years. As per our estimate, Government schemes like Housing for All by 2022, Pradhan Mantri Awas Yojana, among others are expected to create an additional demand of 100-150 MT TMT bar. To meet this additional demand, we plan to double the production capacity from 2.5 million tonne (MT) per annum at present to 5 million tonne per annum in next five years.
@EPC World Media