KAMDHENU ISPAT LIMITED - Securities and Exchange Board of India

Strengths
· Kamdhenu is using most advanced technology “Tempcore Process” for manufacturing of TMT Bars.
· Company’s products meet IS 1786-1985 and ISO 9001:2000 specifications
· Kamdhenu is regularly spending reasonable amounts on Brand promotion to create consumer awareness
· Professional and experienced manpower material management
· We have a stronge net work of 1750 dealers across India. At present company is marketing steel bars, cement,
POP, SS Pipes under “Kamdhenu” brand.
Weaknesses
· Increase in raw material prices and other inputs can affect the business operations adversely
· Government intervention through fiscal measures like increase in duties and levies can affect the business operations
Opportunities
· The concept of appointing Franchise manufacturing units is likely to boost Company’s market share without making
investment in setting up of new units
Threats
· Growth in domestic steel prices is boosted by the users group like builders etc. and the same can prompt the Govt.
to take unfavourable action indirectly affecting us.
· Market competition from existing similar product manufacturers and new ventures which may be established in future
BUSINESS STRATEGY
Kamdhenu products have over the years created a niche market in the northern region of India and demand for its
products has been growing at rapid pace due to its focus on producing Quality products, thereby satisfying the
customers’ need. Company’s brand Kamdhenu has become major brand among the various other Brands available
in the country for Steel Bars.
Indian economy grew by 6.9% during FY 2005 compared to 8.5% in the previous year. The industrial sector remained
buoyant, with output growing at 8.3% as compared to 6.5% in the previous year. Govt. of India is giving priority to
infrastructure as well housing sector by making increased budgetary allocation for Roads, Bridges, Power plants, dams,
rural housing, etc. All this has resulted in a steady growth in steel consumption in the country. The apparent steel
consumption in India grew at the rate of about 5-6% over last decade to a level of about 33 million tonnes in FY 2005.
The growth rate is likely to accelerate in future with further increased expenditure on infrastructure and consequent
demand effect on steel for both fixed asset investment and consumption. The consumption of steel is expected to
increase by about 3 to 4 million tones p.a. for next few years, possibly exceeding 50 million tones by 2010.
Keeping the above in view and to take advantage of this scenario, Kamdhenu has taken a conscious decision to
develop and enlarge its business operations by adopting Franchise route. Kamdhenu has plans to establish its
Stock Yard/marketing offices at various strategic locations and materials required for these yards will be sourced
from its Franchisees, who are existing manufacturers of Steel TMT/ CTD Bars. The said Franchise units would be
manufacturing the products under Kamdhenu’s strict quality control and would be marketed under brand name of
Kamdhenu. Company will derive following benefits of this strategy:
1. Market share of Kamdhenu will go up without investing in manufacturing plants,
2. It would be able to increase its profitability by increased turn-around cycle of available resources.
3. It would be able to derive benefits of handling large volumes.
4. It would be also be entitled to Royalty payments from the Franchisees for use of Kamdhenu’s brand.
The Company has ventured into other building materials like Cement, Plaster of Paris, SS Pipes etc. and has
established franchisee units for manufacture of these products under “Kamdhenu” brand.
CAPACITY UTILIZATION
Installed Capacity Bars (M.T./P.A.) 48,000.000
Actual Production Bars (M.T./P.A.) 38634.810
Installed Capacity Ingot (M.T./P.A.) 22,500.000
Actual Production Ingots (M.T./P.A.) 14804.335
INSURANCE
The Company has taken various insurance policies. The insurance policies cover Standard Fire and Special Perils
Policy, Machinery Break Down Insurance, Money Insurance Electronic Equipment Insurance, Burglary Policy. The
Sum Total of the insurance cover is Rs. 10,09,61,500/- (Rupees Ten Crores Nine Lacs Sixty One Thousand & Five
Hundred Only). We have also taken key man insurance for some of our whole time directors. We believe that our
insurance coverage is adequate as per present requirements of the Company.
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