Unlike fabrication, tiles, paint and other aesthetics of a house, TMT is the only material that if once consumed, will not be replaced till the life of the building.
Q. Is the price gap between primary TMT manufacturers & secondary manufacturers justified?
A. It’s just not about price gap when it comes to primary & secondary manufacturers. It’s about making a successful brand, assuring material availability and owing a robust retail chain network with good distribution policy. So, there are various factors that play a role in pricing and therefore the gap remains.
Q. Can we charge premium because it’s a branded product?
A. Definitely yes. If you look at it from my perspective, I believe that branding is like educating customers about the pros & cons of a product. So in a way, we’re educating customers more about the quality of the product and customers will not mind to pay a little extra when they rely on the quality. In the coming years, when TMT manufacturing capacity will grow, branding is going to play a major role in educating customers about the quality & service of the plant.
Q. Can you throw some light on Kamdhenu’s distribution network across India?
A. We have more than 10,000 retail centers, 1,000 sales managers and about 54 manufacturing units (3 self run) operating across India with a turnover of over INR 70 billion pa. Together, we produce about 2 MnT of TMT every year.
Q. With aggressive expansion of the primary steelmakers in India, are you willing to take risk to expand further?
A. Yes, we’re bullish to expand further in the steel market. Market for Kamdhenu & Primary steel manufacturers is different. When on one hand, produce from Primary steel plants will go to government projects only, our TMT along with government project also been used in private infrastructure development projects like residential buildings. We’re looking forward to expand to about 3 MnT in the future.
Q. What are the upcoming technologies of TMT making in India?
A. We’ve a technology called ‘Double Ribbed Steel’ which is introduced for the first time in Asia. Right now, we’re producing about 10,000 MT per month and this TMT is 2.5 times stronger than the regular TMT.
Q. What is the future of Primary Steel and why do they charge so high?
A. Steel from Primary manufacturers costs more because there are various administrative charges involved. Although, they charge more on every MT but the profit they derive out of it is lower than that of secondary.
TMT once consumed cannot be replaced.
“Unlike fabrication, tiles, paint and other aesthetics of a house, TMT is the only material that if once consumed, will not be replaced till the life of the building. If one is spending INR 10 million to make a house then about INR 0.8 million goes into TMT, i.e. it requires about 20 MT of steel for a house. Therefore, even if one is charging INR 5,000 per MT over the regular Rebars, one would just spend about INR 0.1-0.2 million extra to purchase quality steel. This is just 1% of overall cost of construction, invested in a commodity which cannot be replaced once a house is built.”