KAY2 TMT, India’s youngest steel bar manufacturing brand, has unveiled a new product line despite Covid shocks impacting domestic-focused steel product firms severely, and a senior company official said the move showed the company’s commitment to grow even in a turbulent market.
“KAY2 Xenox is a premium brand of TMT Bars which offers unique rib design that strongly bonds with concrete in a hexagonal pattern and ensures a solid foundation and quality of any structure. It provides bars crucial for construction across earthquake-prone areas that are needed for today’s modern construction,” said Sunil Agarwal, director of Kamdhenu Limited.
He told indoasiancommodities.com that the company had made it to the top 10 list with a production capacity of 600,000 tonnes at the end of the last fiscal year.
“In volume terms, the total market size is close to 60 million tonnes with unorganised players having a market share of over 50 percent. The organised sphere has leading steel players in the segment like Tata Steel, JSW, SAIL, etc,” Agarwal added.
The company had clocked revenue of Rs 2,300 crore last year by selling nearly 5 lakh metric tonnes of steel bars in the domestic market in 2019-20. Operating under the typical franchisee model, the company has forged partnership with 30 manufacturing plants across the country.
Meanwhile, commenting on the impact of Covid-19 on steel bar business, Agarwal said the Covid pandemic the steel bar business in the first half of the current fiscal.
“In April, there were no sales. In the remaining five months, there has been an average sales figure of around 40,000 metric tonnes,” he said.
The company in its medium term growth plan, drafted before Covid-19 crisis, had set the target of reaching close to the sales figure of 7-8 lakh metric tonnes in FY20-21. The target though looks difficult at the end of the first half of the current fiscal owing to Corona effect, Agarwal said he was hopeful of a major turnaround in the second half of the fiscal that may help in getting close to the target.
“After the extremely muted sentiments particularly in the construction sector in H1, we are expecting some serious momentum building in the second half. The government has also promised a serious push to many infrastructure projects. We can expect a modest surge in demand in H2 which may help in offset some of our losses in the first half,” he said, while adding that most of the plants producing KAY2 steel bars were now operating at least 90 percent of their capacity.
According to Agarwal, the company will be pursuing a rapid capacity expansion under the franchise model again once the business gets back to the normal state.
“In the next two years, our plan is to touch an annual production capacity of 15 lakh metric tonnes,” he added.