Mumbai: JSW Steel, India’s third-largest maker of the alloy, sees prices and demand for long steel to remain “sluggish” for now, a top official told reporters on Tuesday.
“(In) long-product there is some softness, prices and demand are sluggish,” chief financial officer M.V.S. Seshagiri Rao said on the sidelines of a news conference.
The company this month lowered prices for long steel, used in construction, due to weak demand, he said at the launch of its branded retail showroom.
JSW Steel, which plans to open 200 such branded showrooms by March 2010, plans to increase share of retail sales to up to 25% in the next 2-3 years.
The company has 72 retail shops now, which will grow to 600 in two years, Seshagiri Rao said.
“Demand has gradually increased, volumes have gone up from 150 to 200 tonnes when we started in January 2008 to 600 tonnes per shop per month now,” Jayant Acharya, director of sales and marketing, said.
These showrooms are based on franchise model with JSW Steel bearing 20% of the total costs.
JSW Steel is selling the alloy to Jawaharlal Nehru Stadium for the Commonwealth Games to be held in New Delhi in 2010. The firm also sold steel to the Tata Motors’ Nano plant in Gujarat.
The push on infrastructure by the government will boost demand for steel “substantially”, Rao said, adding the company was scouting for coking coal mining assets in Africa and Australia.
The firm also plans to reduce exports to 13% of sales in 2009-10 from the current 20%, due to higher rural demand, he added.
JSW Steel shares closed down 0.06% at Rs683.5 in a Mumbai market, which ended 0.28% lower.