“High demand potential exists for value-added steel in India”
Provide an overview of NLMK and its product offerings.
NLMK is of Russian origin, one of the largest steel makers in the world and specialized steel grades with capacity of 18 million tons per annum comprising flat and long products. The specialized flat steel plates are produced at our plants in Denmark, Belgium, and Italy. Outside of Russia we have substantial re-rolling capacity in Belgium and US. The steel produced by these plants comprises, commercial grade high alloyed steel with special treatment to achieve suitability for various demanding and critical application in industries like cement, steel, mining, mineral processing, and construction equipment industries. The abrasion resistant steel is marketed under the brand of 'Quard', and high strength steel under the brand name of 'Quend'.
Given the price sensitive character of the Indian end users of construction equipment, how do you perceive the demand of specialized steel in India?
Demand of specialized steel is in its nascent stage in India. However, we see with demand of the equipment manufacturers growing to deliver total lifecycle costs, based on the owners requirement, the potential to promote specialized steel is high in India. We perceive the market of construction equipment and mineral processing industry quite attractive, given its sheer size across verticals, translating into significant volume. The size of the market is bound to grow, with demand of equipments forecasted to go up with increasing emphasis of the government to develop infrastructure projects. We will play a vital role in meeting the requirements of specialized steel in India. This is in the backdrop of deficit local manufacturing of specialized steel. We will be looking to meet the requirements based on our research and development (R&D) knowledge that we jointly undertake with OEMs globally to provide specialized steel based on their applications.
What are your R&D capabilities that go towards production of value- added steel?
As mentioned, our R&D is totally based on strong co-engineering with the OEMs. We produce the product at our plants adhering to strict quality standards based on the given product specifications of the OEMs. Based on the requirements of the OEMs to have minimal wear and tear of the equipment and their attachments, we are able to translate that into very low carbon content in the steel. One of the vital aspects in our R&D is achieving optimal weight characteristics while achieving other desired characteristics, thus helping OEMs globally to deliver higher productivity.
Usage patterns of equipment vary in India as compared to advanced markets where the equipment are made to work indexed to their specified requirements in accordance with their applications. How is your specialized steel adaptable to address typical application requirements?
Our practice of co-engineering to develop the products in association with the OEMs by understanding their present product application and future usage is taken into consideration. For tipper trucks and wheel loaders, we provide the steel based on their loading and haulage pattern. Designing of rock and box bodies made of specialized steel is testimony to that.
Do you supply your products through distributors globally? What is your strategy of ensuring timely product availability in India based on the big expanse of the market?
Our strategy is to keep production and distribution as close to customers as possible. We produce value-added steel based on engineering association with the OEMs.. As an example, in India, to ensure timely supply of our products, we have a 10,000 square meters warehouse facility close to Mumbai port that allows us to supply just in time in the most cost efficient manner. The warehouse is integrated to adequate logistics support.
Who are the OEMs you are supplying your products in India?
We count almost all major OEMs as our customers. Our products are found in bodies of dump trucks, tippers, back hoes, cranes, mineral processing etc equipments produced by the likes of JCB, Caterpillar, Metso, L&T etc.
Are you looking to tap the equipment replacement and product reconditioning market in India?
Replacement and product reconditioning market is in its nascent stages in India. OEMs here find it challenging to emphasize and execute product reconditioning across varied segments and in large scale. This is because the products and attachments, post warranty and after completion of their total lifecycle are uneconomical to repair because of logistical and cost challenges. Further, the replacement and equipment reconditioning market still continues to remain largely unorganized in this country. However, we are not discounting the market altogether, given its sheer size. We may consider appropriate channel partners to tap the market jointly.
Published on:
12 January 2016
Published in: NBM&CW January 2016
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