Essar Hypermart, the retail arm of Essar Steel may be hived off from the parent company once the GST comes in place. At present, the retail arm of the company, is having 100 Hypermart and 419 Expressmarts across India and touched a turnover of Rs 3600 crore in the last fiscal year.
Speaking to Business Standard, Essar Hypermart, CEO, Girish Rao said,” We may think of hiving off from the parent company, once the GST is in place, as the tax structure would be rationalised.”
The company offers a comprehensive range of flat and long steel products for a variety of applications and caters to the customers in the SME segment ranging from small manufacturers, local fabricators and general engineering firms to large corporations and construction companies.
Essar Hypermart which is on an aggressive retail expansion plan is focusing on the online sales model and expects that in the coming years almost 15 per cent business would come from online sales. The company at present has started this procedure on the trial basis in the states like Gujarat and Maharashtra and is planning to cover the entire country with this model by the end of current financial year. It has plans to introduce this mechanism across India very soon, probably by December this year Further,the steel giant is planning to increase its number to 126 Hypermarts and 650 Expressmarts by March 2011.
Also, it is planning to increase its product portfolio. He added, “ We are planning to introduce structural steels like Pipes & tubes to our product portfolio. Some of the items either would be made by ourselves while the others would be outsourced.”
With increased network expansion, the company is eyeing a turnover of Rs 4000 crore in this fiscal year as against Rs 3600 in the last fiscal. Last year we sold, 1.1 million tones of steel and this year we are expecting to sell 1.6 million tonnes.”
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Also, it is planning to deliver steel at the customer premises. Already it has launched in Rajasthan and Gujarat and plans replicate in other centres also.
In Northern region, comprising Punjab, Himachal Pradesh and Jammu & Kashmir alone there are 8 Hypermarts and 27 Expressmarts(franchise based and small format) and the total market size is worth 650,000 tonnes of steel per annum and the company enjoys the market share of 15 per cent and has aggressive plans to increase the market share to 20 per cent by this fiscal It has plans to open one more Hypermart and 4 Expressmarts, probably in a Hypermart in Amritsar, and express marts in Patiala, Pathankot, Bathinda, Srinagar, Mandi, and Shimla.”