Indian steelmaker Essar Steel has announced that it is merging its steel processing center and distribution unit with Essar Hypermart, its retail chain for steel, in order to cut costs, expand its business reach and deliver products to customers faster.
The new entity's distribution model will expand the retail chain's offering to customized steel from just standard steel plates earlier. It will also stock long steel products made by other companies. Essar Hypermart previously focused on standard flat steel and orders for customized steel were placed with service centers.
According to Essar Steel, the combined entity is expected to sell 2.6 million mt of steel this year compared with the 1.8 million mt by the two divisions last year. Because of the cost savings and other advantages, the earnings before interest, tax, depreciation and amortization is forecast to grow six times.