India: RINL's new marketing strategy targets 25% rural sales

Steel PSU Rashtriya Ispat Nigam Limited (RINL) has taken a decision to increase its presence in the rural markets riding a change in its marketing strategy. Working towards this end, around 20-25% of its sales, henceforth, will be targeted at the rural market, SteelMint learnt from a trading source. When asked, a company official said, "Yes, a sizeable amount of domestic market will comprise rural sales, henceforth," declining to give figures. At present, the long products major has a negligible presence in the rural market, the source indicated.

RINL, which is the holding company for Vizag Steel Plant (VSP), "has entered the distribution model in a change in its marketing strategy to achieve its new rural sales targets," the source further said.

In fact, working to strengthen its rural presence, the company launched its pilot "two tier sales and distribution" project on August 7, 2020, whereby the first rake was flagged off to a distributor in Tuticorin in the presence of key company officials, including Chairman P.K. Rath.

Sales target

The company has bettered its sales target for July, 2020. Against the targeted 3.5 lakh tonnes in July, it achieved a higher 3.9 lakh tonnes, it is learnt. In July, export volumes had been at 1.2 lakh tonnes in this 3.9 lakh tonnes corpus.

RINL has set itself a higher sales target of 4 lakh tonnes in August, 2020, it is learnt.

While a company official said it would be difficult to give an exports target for August, RINL has been maintaining export volumes of around 1.2 lakh tonnes and so the PSU's exports for August would easily be in the range 1.2-1.5 lakh tonnes, it is understood. Consequently, the balance 2.8-3.5 lakh tonnes would be targeted at the domestic market in the current month.

In June, 2020, the company had notched up sales of 2.9 lakh tonnes, of which 1.2 lakh tonnes had comprised exports.

Inventory

Importantly, the steel PSU has been able to reduce its inventory levels over the last one month. Inventory has been reduced from 5 lakh tonnes on July 1 to 3 lakh tonnes by July 31, the company source informed, indicating that the higher sales resulted in a reduced inventory by end-July.

Meanwhile, RINL's liquid steel production in July was at 1.95 lakh tonnes.

~By Madhumita Mookerji