Vulcan braces for pent-up demand as lockdowns end
Mr Jones said Vulcan’s sales reps are at the forefront in an industry not known for using traditional sales techniques.
“In our organization, we do a lot of telephone canvassing,” he said.
He said the lockdowns have caused delays in construction and infrastructure projects, and additional momentum in the industry is likely as economies open up.
“A wave of demand is emerging,” he said.
Vulcan purchases and distributes some of its steel products from ASX-listed BlueScope as part of its operations. But it is also a competitor of BlueScope in certain segments. BlueScope announced the highest annual profit in 19 years in mid-August.
He is also a distributor of certain InfraBuild products. InfraBuild is the Australian steel company that is part of the GFG Alliance’s larger global operations led by British billionaire Sanjeev Gupta.
Mr Jones said Vulcan bought around 83% of its carbon steel, used for air conditioning pipes, beams and sheet metal, from BlueScope and InfraBuild and that this has proven to be a big advantage at a time when Delays in shipping channels and logistical disruptions cause difficulties for importers in a wide range of industries.
With steel coming from Australian factories, the potential for delays has been greatly reduced.
“It’s a much shorter supply chain,” he said.
Vulcan’s prospectus forecasts total steel demand in Australia to reach around 6.32 million tonnes this fiscal year, compared to 6.21 million tonnes for the year ended June 30 and 6.1 million tonnes for the ‘fiscal year 2020.
With an issue price of $ 7.10 per share, Vulcan is raising $ 372 million in new capital and at the issue price would have an indicative market cap of $ 933 million on the ASX. The company will be listed on both the Australian and New Zealand stock exchanges.
Existing shareholders will retain 60.2 percent of the company.
A retail offer will run from October 25 to November 2. Vulcan shares are expected to start trading on both exchanges on November 4.
Vulcan has its own large transport fleet, which it believes improves on-time deliveries. It owns 92 trucks, 33 trailers and operates 12 third-party trucking trucks.