KAMDHENU ISPAT LIMITED - Securities and Exchange Board of India

The sponge iron is one of the raw material required for manufacture ingots used for manufacture of Steel Bars the
main product of the Company. Therefore the Company thought of going into backward integration.
The Company acquired Land measuring 79.85 acres for the Project at a cost of Rs 67,28,675. The acqusition of
land is primary requirement for making application of mining lease to authorities. The Company also incurred Rs.
33,67,499 towards brokerage/ change of land use charges/ Ground leveling charges and Rs. 13,94,000 towards pre
operative expenses.
The Project could not be further undertaken since Company could not get mining rights in respect of Mines of Iron/
Manganese Ore which is a basic raw material required for manufacture of Sponge Iron. The success of Sponge Iron
project is based on captive availability of iron/manganese ore. We are trying to get the licenses for Lease of mines
and in case we are unable to receive the Lease of mines we will have to shelve the Project. In case we are able to
get Mining rights we intend to implement the Project for which Funds will be tied up separately with Insitutional
Funding, Promoters Equity and Internal accurals. No figures of funding can be provided at present since we are not
sure when the mining rights will be granted to the company. The investment made in land has appreciated and
therefore if ultimately we have to shelve the project the company will recover all expenses incurred by sale of land.
In the meanwhile we entered into a Partnership with Smt. Sujata Rout and Sri Sukanta Chawan Rout both residents
of Rowkela under the tradename M/s. SR Ferro Alloys for seeking Mining Licenee from Orissa Government for
undertaking mining of Iron/Manganese Ore. We have further entered into an agreement with the aforesaid partnership
firm to buy entire mining produce as and when raised from mines for capititive use in Orissa Project. M/s. S.R. Ferro
Alloys is yet to get mining Licenee from authorities at Orissa.
MARKETING STRATEGY
The strength of our company lies in the brand value of Kamdhenu and our credibility in making high quality
reinforcement bars. We will continue to focus on strengthening the existing brand. The Brand Value of Kamdhenu
influence all that we do in terms of our marketing strategy. Our product have certain core values such as high
strength, corrosion resistant characteristics, dimensional tolerance etc. We have strong visible brand which has
awareness across India.
Our Brand objective is to expand the customer base, ensure customer loyalty and increase the depth of the consumer
relationship which we are achieving by expansion of distribution network.
The company having its marketing office at Delhi has an extensive and well-connected network of more than 1750
dealers dispersed across the country. Company’s products are already well established in the market.
The above strategy is so far creating more brand awareness and in long run this would help the company in achieving
higher market share.
Company’s products command a price premium in the market owing to its established brand name. Presently the
brand premium is ranging between Rs.300 to 700 per metric ton depending on different geographical areas and
demand supply factors of the particular area.
We organize seminar and conferences of its dealers and distributors, architects and civil contractors at regular
intervals to increase its brand awareness and to take feedback/ suggestions from them. Kamdhenu distributes its
products literature and brochures at such conferences, which highlights the latest technology used in manufacturing
the products. All these steps taken by the Company last in 3-4 years have resulted in a creation of very strong brand
awareness.
Further for information of franchisees, dealers and distributors, we publish a monthly news letter titled “Ispat Sandesh”
in Hindi and English which offers us opportunity to interact with them.
The concept of having strategic tie up with other manufacturing Units and establishment of stockyards at different
locations would give a boost to the company’s existing marketing network. It should also increase the Company’s
profitability considerably as margins in retailing are always better than wholesale trade.
Kamdhenu has taken a conscious decision to develop and enlarge its business operations by adopting Franchise
route.
The concept of Franchisee in steel Industry is rather new to India but it makes eminent sense.
At the vanguard of this new frontier is the Kamdhenu which is rapidly emerging as the Leading Franchisee chain
build strongly on Kamdhenu brand. Over Next five years we intend to build a formidable chain of Franchisees who
together will hold substantial market shares of Steel Bars and other Products which we intend to introduce at
appropriate time. For us it will result in expansion of value of Products being sold under Kamdhenu brand with
minimal capital expenditure.
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