2019 Round-Up – A Look at The Industry Changes & Developments in 2019
The year 2019 saw the iron and steel industry at the heart of global development. With lots of ups and downs, the year 2019 remained an eventful one and overall, the steel output and demand grew.
At the beginning of the year 2019, volatility surrounded the steel industry. The slowdown of the global economy led to a downfall for the overall steel demand. The major players in the domestic market witnessed a decline in their revenues and globally the steel demand continued to fall because of uncertainty, trade tensions, and geopolitical issues.
Even though the global and Indian steel industry isn’t experiencing a big boom, the future of the global steel pipe market looks bright. With an increasing demand for the steel pipes in the oil and gas, water and wastewater, power generation, and other industrial sectors, the international steel pipe market is anticipated to reach $68.4 billion by 2024 with a CAGR of 1.6% from 2019 to 2024.
When segmented on the basis of electric resistant welded and S&S (submerged arc welded and seamless), the ERW is expected to grow at 8-10% as opposed to 5-6% for S&S for the next 5 years. ERW owes this growth to the increased usage of these pipes for irrigation, infrastructure, water supply, and numerous other applications. Moreover, the execution of the recent city gas distribution (CGD) licenses will elevate the sales of ERW and S&S. The same implies that an amount of Rs. 5000 crore per annum will be generated for the next 10 years, indicating good business opportunities for ERW and S&S in the upcoming years.
The gain in the ERW sections means that 2019 was a significant one for APL Apollo as it is a leader of Electric Resistance Welding (ERW) Steel Pipes and Sections in India. APL Apollo expanded its market share from 12 percent in FY15 to 18 percent in FY19 and the organization also gained high revenues (average return on equity of 19 percent over the last 5 years). Several factors aided in its profitability in 2019 such as a large-scale requirement for ERW pipes and sections, a pan India network of 790 distributors and better incentives to them.
In spite of the economic and steel industry slowdown, APL Apollo emerged out to be a winner as the organization created a niche for itself in the market as it moved from selling steel as a commodity to selling steel as a brand. Earlier, the firm only concentrated on the B2B business which meant supplying the raw commodities to the fabricators which would then be used to form different products. However, APL Apollo in the recent past has reached out to customers and expanded their domain from B2B to B2C.
The year 2019 was eventful for APL Apollo. Being a leader in the steel tube manufacturing industry, we went above and beyond our duty to make people aware about the protection of the environment with the campaign ‘Steel for Green’. The campaign’s sole motive was to inspire people to switch to steel and help in the conservation of trees. It also conveyed the benefits of steel products and showcased how they are a better choice for the environment.
APL Apollo, to create brand awareness and to add a touch of glamour to the brand, got on board megastar Amitabh Bachchan as the brand ambassador of APL Apollo with the launch of ‘Desh Ki Andekhi Taqat’ campaign. It focussed on how APL Apollo’s steel pipes are omnipresent and enhance the facade and aesthetics of the house and grant strength to them. Several products were launched with the campaign, which are as follows-
- Apollo Chaukhat: The campaign highlighted the importance of Apollo Chaukhat. It suggested how Apollo Chaukhat qualifies as the right choice because they are termite-resistant and provide the frames of the house with unmatched strength.
- Apollo Signature: The campaign also focussed on Apollo Signature, the designer pipes that lend an aesthetic touch to homes and furniture. Moreover, they are highly resistant to rust, corrosion and are eco-friendly.
- Apollo Steel Planks: As 2019 neared the end, Apollo Steel Planks were launched. The same enhanced the range of the products and offered the country a better alternative to wooden planks.
To take the brand as well as the country forward in more ways than one, APL Apollo associated with different types of sports’ teams to increase their awareness and aspire young citizens to inculcate sports in their everyday life. The same also helped in tapping into the fanbase of various sports. In Mar 2019, APL Apollo partnered with Delhi Capitals for the Indian Premier League because of the wide popularity of the game in India. As a part of team association, Delhi Capitals sported the brand’s logo on the back of the player’s jerseys. Just after two months of the IPL, the organization associated with the Haryana Steelers for Pro Kabaddi League, Season 7. In the fourth quarter of the year, the Indian Super League football club Bengaluru FC agreed for a one-year sponsorship deal with APL Apollo for the 2019-20 season.
The steel demand worldwide is expected to rise by 1.7% to 1.81 million tonnes in 2020 and the demand for steel tube products is expected to reach 195 MT. In this year too, APL Apollo endeavours to continue being the leader in the electric resistance welded steel pipes and sections and achieve more with constant hard-work and by reaping the benefits from the high demand of ERW as well as tube steel products.