value added steel) and will be adding another 2.3 million tonnes by 2014, taking its total capacity to 5.5 million tonnes, around 40% of its total 14.3 million tonnes volume.
Goutam Chakroborty, analyst with brokerage Emkay Global said while the companies are rapidly expanding their presence in the rural landscape with their own organised retail chains, these outlets still contribute very less to their overall sales.
“The rural-urban mix will not change significantly for these companies for years to come but still these stores are important as they help in penetrating the company's brand name deeper in rural pockets,” he said.
According to the ministry of steel, India's total steel consumption per capita stands at 60 kg a person while the rural stands at a significant low of 10 kg per capita.
The rural market mainly accounts for the sale of construction-based materials or long products while flats are mainly used by white goods and automotive sectors, which are primarily categorised as urban consumption.
The sale of long products or construction material too are largely skewed towards urban projects comprising almost 65% of the total consumption, while rural amounting for just 35%.