With 10 plants producing around 2.5 million tonnes per annum, APL Apollo Tube is the largest producer of structural steel tubes in the country.
The demand for structural steel in India is likely to pick up in the coming years and the market is likely to grow at a CAGR of about 5.5% in the next five years.
With 10 plants producing around 2.5 million tonnes per annum, APL Apollo Tube is the largest producer of structural steel tubes in the country. Chief financial officer Deepak Goyal shares company’s potential for further growth with Surya Sarathi Ray. Excerpts:
How do you see demand for structural steel picking up in the country? The demand for structural steel in India is likely to pick up in the coming years and the market is likely to grow at a CAGR of about 5.5% in the next five years. There is a paradigm shift in the approach to steel consumption and increased recognition and acceptability for structural steel tubes and pre-engineered building material in India now. While globally the proportion of structural steel tubes is around 10% of the total steel consumption, in India it is still slogging at 4-5%. So, there is further scope for increase in the consumption level.
How are you placed to leverage the potential? We are the pioneers in the large diameter hollow section tubes and pipes in India and are well-placed to leverage the potential for the increased demand created due to government’ thrust on infrastructure development, increased urbanisation and the enhanced appetite of Indian consumers for world class commercial structures. The growing commercial building sector combined with the government’s initiatives towards green buildings, smart cities, make in India scheme, etc., are expected to boost the structural steel fabrication market in India and our company being the market leader and forerunner in bringing niche products to the market, is well poised.
Are you looking at capacity expansion? We don’t have plans for capacity expansion in the immediate future. At present, the company has put on hold a few projects that were being contemplated earlier, in order to augment the resources due to the pandemic situation. However, we have plans to expand capacity in next 2-3 years and will revisit those plans as and when a more conducive economic environment emerges.
Are you looking at setting up a base beyond the boundary of the country? We have a wholly-owned subsidiary based in Dubai FZE. Though we have no immediate plans of establishing base in other overseas locations, we may review the same in future.
Is there any inorganic growth plan in the domestic market? No, there is no inorganic growth strategy at present. However, as and when an attractive opportunity emerges that helps us to grow and is in consonance with our corporate objectives, we will consider them.
What kind of support do you expect from the government to enhance consumption of structural steel in the country? The government should increase the use of structural steel in its infrastructural activities for various commercial structures and buildings. It should also create awareness among private consumers for using more of structural steel in construction sector, transport sector, machinery, etc., for their strength, durability, aesthetic value, reduced environmental impact, etc. as compared to conventional material. The structural steel tubes reduce tonnage by 25% as compared to conventional products and are also more aesthetically appealing. The government may also look at providing some incentive schemes to consumers for using the structural steel in their projects, in order to encourage increased consumption.