Essar Steel to up its retail network to 650 by FY12

The Shashi Ruia-led Essar Steel is betting big on retail sales of its steel products and plans to ramp-up its Hypermart outlets to 650 by FY12, a senior company official said.

With the infrastructure sector gaining momentum on the back of an economic revival, the company is also eyeing higher sales from its Hypermart outlets by next fiscal, the official said.

At present, Essar Steel has 500 Hypermart outlets, which, after the ramp-up, will increase to 650 by FY12.

"We are earning good revenues from our retail business. Our stores are doing good business in west and south India. We plan to open at least 150 Essar Hypermarts by FY12," Essar Steel's Executive Director (Sales and Marketing) Vikram Amin told PTI here today.

The company is targeting a sale of 1.50-lakh tonne per month by then as compared to the present 1-lakh tonne, he said.

"Our 35 per cent revenue comes from Essar Hypermart and we aim to maintain the same momentum going forward," Amin said, adding that its retail business is poised for a healthy growth going forward.

Essar Steel, which is known as the pioneer of steel retailing in the country, forayed into the segment in 2006 by opening its first Essar Hypermart at Gandhidham in Gujarat.

When asked whether the natural calamity in Japan would affect the Indian steel industry, Amin said, "India's steel market will be affected a little bit in general, but the automobile industry will be affected in particular."

"There is no doubt that South Korea and south Asia will be more affected by the events in Japan. Exports (Japanese) will be affected as their steel-makers will look to meet their domestic demand this time," he said.

Major steel-makers in Japan have been reportedly hit by the devastating Tsunami that struck the Pacific nation end-last week. Nippon Steel's Kimitsu works and JFE Steel's Chiba and Keihin works are reported to have been heavily damaged.

Industry experts said that raw materials yards and many steel-works on Tokyo Bay are also likely to have been ruined.