The global economy and business industries are advancing significantly today. Formidably, India too envisions adding $1 trillion to its GDP every 1.5 years over the next six years, aiming to become a $10 trillion economy by 2032. Any growth in India's GDP or infrastructure directly impacts the steel industry. Amidst the expected growth, Tamil Nadu aims for a three trillion economy, which is 60 percent of India's target. The state is the second largest GDP contributor to the country. With a growing automobile industry and increasing investments, Tamil Nadu's growth prospects are excellent.
The state has attracted many companies and signed MOUs for upcoming projects, leading to growth in warehousing, logistics, and real estate investments. The market size in Tamil Nadu is expected to grow significantly in the next two to five years. Although there may be lean seasons, overall demand is set to increase, especially in the pre-engineered building and logistics segments. With the entry of 4PL and 3PL logistics players, along with available land for warehouses, the growth potential is enormous. Poised in 1989, Chennai based Bharat Steel Chennai Pvt Ltd (BSC) aims to be part of this growth story and contribute to the development.
BSC was established in 1989 as a proprietary concern by Sri. B. Goverdhan Agarwal. The primary objective was to engage in the trade of branded products initially manufactured by PSU Steel Authority India Limited (SAIL) and later also with Rashtriya Ispat Nigam Ltd (RINL) to address the demand for iron and steel in industrial areas. Over the last 35 years, beginning from a small office, it has grown from trading 100 tons a month to around 10,000 tons a month. Currently, the company is an authorized distributor for SAIL structural steel and TMT, as well as VSP dealers for TMT and structural steel.
Its product range includes HR coil, PM Plate, Structural steel, and TMT rebars. BSC exclusively deals with primary steel and operates a steel processing unit in Chennai & Salem, providing 25x2000 CTL with precision and concave convex levellers, 12mmx2000 slitting capable of processing 800mpa material. It also has a roofing business under title ‘Crayon Roofing & Structures’ involved in manufacturing of purlins and roofing sheet with distribution of JSW Colouron+ and works as an EPC company for pre-engineered buildings and steel construction under title ‘Metfraa Steel Buildings Pvt Ltd’.
A significant transformation in the market landscape has been the emergence of numerous aggregators and VFCs, equipped with substantial financial resources and access to top talent, enabling them to operate on a national scale. These entities are disrupting the market by operating on thin or non-existent profit margins to gain entry. This influx of capital and new market players has considerably disrupted the industry, which was previously dominated by one or two major players.
Tracking the flow of materials from suppliers to customers has become notably more challenging due to the increased number of aggregators and the nationwide market expansion following the implementation of GST. The market has become more open, and the dissemination of information through platforms like WhatsApp has led to disruptions in pricing and market dynamics. Additionally, uncertainty surrounds imports, as there has been a significant increase in imports over the past year and a half, intensifying competition in the market driven by cheaper imports and the entry of new manufacturers.
Key industry players such as NMDC, AMNS, and Tata are expanding their capacities, further intensifying competition. At the distribution level, there is immense pressure to achieve high sales volumes. Combined with thin profit margins and intense competition, these factors have significantly heightened the challenges in the market.
There are several challenges to consider when addressing customer needs, including the lack of clarity in customer requirements, the predominant focus on pricing, and the complexity of product application and material selection. Additionally, accommodating long-term credit cycles poses specific challenges. It is imperative for customers to be well-informed about product details, quality, and suitability, rather than being solely price-driven. Encouraging customers to inspect materials, understanding the right sources, and avoiding grade substitution are also significant hurdles. Furthermore, the risk of inadvertently receiving incorrect materials due to supplier misunderstandings can lead to product failure during testing.
To address these challenges, BSC has prioritized technological advancements to facilitate customer understanding of offered products and brands. Utilizing SAP V1, the company provides comprehensive documentation, including batch information and raw material details. The automated system ensures the accessibility and linkage of all necessary documentation, such as invoices, TCs, and certificates. By automating the provision of essential documents upon the departure of customers' vehicles from BSC's warehouses, manual requests are eliminated, and the risk of incorrect materials being sent to customers is significantly reduced. Moreover, BSC's state-of-the-art warehouses, spanning 75,000 sq.ft. of closed space, are meticulously maintained to uphold material quality and hygiene standards. The organized and neatly stacked materials in these warehouses not only impact customers' purchasing decisions but also streamline their follow-up processes.
BSC’s business model is based on transparency. It prioritizes transparency as cutting corners can lead to losing customers, which it wants to avoid. It also focuses on engaging closely with its customers to understand their requirements and provide them with solutions tailored to their specific needs. It offers a variety of materials to reduce waste and costs for its customers. BSC’s goal is to build long-term relationships with its customers, much like a family. It strives to continually improve and grow together with its customers, ensuring that they benefit from its products and services. It also aims to minimize material rejections and reduce process times, and tracks its performance to ensure on-time delivery in full quantity. Additionally, it actively seeks and values feedback from its customers to continuously improve its systems and processes based on their inputs.
While, technology is a major part of BSC’s system, it also empowers its value chain. The company meticulously regulates processes from client onboarding to product delivery. For instance, it leverages Google Forms to collect new customer data, seamlessly integrated with its SAP system to automate operations. This automation minimizes manual errors, such as inaccuracies in addresses and GST filings. Once a sales order is inputted into the system, the operations team is restricted from making alterations. The company's system is intricately designed to adhere to specific protocols, including bespoke customer requirements for packaging and color coding, stored in the business master profile. Every sales order must comply with customer specifications, and the material is inspected by QC team before delivery. Furthermore, the company ensures statutory compliance by integrating its SAP systems with third-party GST software, facilitating effortless data transfer and GST processing while saving time and reducing errors. Moreover, the company is actively exploring the potential of AI and ML to address recurring challenges, such as understanding customer needs and determining quotation pricing, with the goal of streamlining processes and reducing manual intervention.
Growth Chart & Expansion Plans Ahead
BSC has grown profoundly over the years and still has a lot of room for growth. Three years ago, it transitioned to its state-of-the-art warehouse, consolidating its operations from multiple locations into a single, improved facility. It has significantly expanded its covered space from zero to an estimated 100,000 sq.ft. by the end of March 2025. Additionally, it has established its own service center, making BSC one of the few players in Tamil Nadu capable of processing 25mm, two-meter materials with fine levelers and advanced technology machines.
Over the past three to four years, it has experienced growth in its top line, infrastructure, and in-house equipment, positioning the company as an integrated player capable of providing comprehensive solutions to its customers. Looking ahead, it has ambitious visions for 2030 and is actively working towards achieving its targets across all its companies. By integrating with other companies, it aims to create a complete ecosystem that provides end-to-end solutions to the customers, covering everything from construction to the supply of goods. For instance, through its company Bharat Steel can meet a range of customer requirements, from construction materials to regular supplies. It is also in the process of establishing a large PEB/Fabrication plant, which will further enhance its position in the market.
Looking ahead, it plans to incorporate a small machine shop into its operations, enabling it to offer additional services such as laser cutting, press break and component manufacturing. This initiative is driven by its goal to provide comprehensive solutions to the customers, reducing logistic costs and centralizing their needs within its operations. It has often observed that customers generally send materials purchased from BSC to various places for job work such as cutting or bending. By adding these capabilities to its infrastructure, it aims to offer a one-stop solution, ensuring better control and understanding of its customers' needs from start to finish. BSC has a comprehensive roadmap for the group with specific milestones that it aims to achieve by 2030. It anticipates significant growth as manufacturers and suppliers like JSW and SAIL are expanding their capacities. It's crucial for the company to grow at a similar pace in order to remain competitive. However, the company’s primary focus is on sustainable and profitable growth.
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