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ArcelorMittal Nippon Steel India (AM/NS India), among the largest steelmakers in the country, is expanding its presence in the retail market here.
With a focus on coated products, the company has introduced a distributor-owned, distributor-operator franchise-based retailing model called Mera Hypermart. This comes in addition to existing company-owned and company-operated formats, says Ranjan Dhar, Chief Marketing Officer, AM/NS India.
In an interview with businessline, he talks about the expansion of the Hypermart formats, ramping up ‘Mera Hypermart‘ to 100 partners, and prioritising offerings for MSMEs, including managing price volatility. Excerpts:
How big is the coated product portfolio for AM/NS India and also its retail vertical?
ArcelorMittal Nippon Steel India has a product portfolio of over 600 steel grades, of which coated products are an important component. Our range of coated products, including galvanised coils and sheets, corrugated sheets, and color-coated coils, together account for almost 30 per cent of sales volume and significantly more in terms of value.
Hypermart, our flagship retail distribution network, accounts for 30 per cent of sales, with a large proportion of this being coated products, which are traditionally more retail-oriented.
We are broadening our retail distribution across India and expect to increase volumes in our coated segment by more than 1 million tonnes per annum (MTPA) in the near term.
Why did the company feel the need to launch the ‘Mera Hypermart’ model when it already had existing Hypermarts?
As AM/NS India’s flagship distribution network, Hypermart now has three business verticals.
The ‘Hypermart Quantum’ caters to wholesale customers via direct dispatches from our plants; the ‘Hypermart Stop Shop’ is the company-owned and company-operated retail outlet (where retail customers and MSMEs source material); and the third is ‘Mera Hypermart’, which extends the previous company-owned, company-operated model to a distribution model that is, a distributor owned, distributor operated model.
Mera Hypermarket will have a pan-India coverage. It currently focuses on galvanised and pre-painted products for retail use. It acts as an extended sales counter for the coated products.
A series of Mera Hypermart marketing campaigns will be taken up to increase visibility and reach of AM/NS India’s coated products. Expansion of product portfolio will also happen.
What is the expansion plan for Mera Hypermart?
Mera Hypermart is a franchise model with a network of 72 partners distributed across India selling 0.7 million tonnes (mt) per annum. These partners have been appointed based on various factors such as territory size and market potential.
We are expecting to build a network of more than 100 Mera Hypermart partners in the next few months with a significant increase in target sales volumes.
And what about the other retail formats?
We have 17 Stop Shops across India, which will expand to 25 by this year-end.
Considering the increase in capacity that AM/NS India is planning, how much of it would be domestic consumption vis-a-vis exports?
Our capacity expansion is aligned with key national priorities such as India’s ambition to increase production capacity (of steel) to 300 mt by 2030. Through initiatives such as the PLI scheme for specialty steels, we are supporting efforts to reduce import dependency in high-growth industries like agriculture, automotive, and infrastructure.
Our (AM/NS India’s) priority is the domestic market with any surplus serving export markets. The MSMEs are an important growth engine, and we are focused on how to better serve them.
The Hypermart and Mera Hypermart network prioritises the MSMEs as a key segment by giving access to markets, technology, capacity-building support, and so in in the hinterland.
Considering volatility in steel prices, how will these new initiatives help your target customers?
Yes, steel prices have been volatile in recent quarters.
Steel and (steel-making) raw materials that go into its manufacturing are globally traded, exposing them to volatility from both the demand and supply sides.
While domestic prices are not immune to these factors, at AM/NS India, we work to target retail prices that reflect a balance cost of inputs and services and (are) yet competitive to sustain the business. We also offer special incentives to service local demand.
We are also evaluating technologies to enhance price discovery in the domestic retail segment, such as leveraging AI to ensure price transparency.
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