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Garang Metal Limited: Market Entry into Angola*

ET Cases - GSMC, 10 Pages
AUTHOR(S) : Biswajita Parida - FPM, Indian Institute of Management Ahmedabad, Anush Mohan - Student, Centre for Social and Organizational Leadership (C-SOL), Tata Institute of Social Sciences

Case Preview

Garang Metal Limited: Market Entry into Angola


On September 19th 2013, the ninth annual general meeting of Garang Metals Ltd. (GML) was held at their head office at Rabindra Okakura Bhavan, Salt Lake, Kolkata. Given the firm’s strong market and financial performance during the financial year 2012-2013, the discussion for the planned agenda transpired smoothly. Towards the end of the discussion, N. Agarwal, Chairman & Managing Director (CMD), Garang Group, asked his nephew, Deepesh Agarwal (Deepesh), Director, GML, for his vision for GML for the next ten years. Specifically, N. Agarwal asked Deepesh how he could make GML a strong player in emerging global markets. The question itself was not new, since both of them had been contemplating a move towards globalization during the previous four months. Deepesh replied that he would revert within the next three months. Soon after, he convened a meeting of top executives to discuss potential foreign markets. After a lot of deliberations, China and Africa emerged as the top two contenders for investment. At this stage, Deepesh formed two teams, one to study the Chinese market and the other to study the African market. After a preliminary study, it was found that China had excess steel against domestic demand and given GML’s current cost structure it would be unfavorable for GML to enter the Chinese market. However, the other team which studied Africa came up with the suggestion to enter Angola. Deepesh became really excited regarding market entry into Angola..........

Company Background

GML was a steel producer and marketer, incorporated in 2005, with its registered office in Kolkata, India. GML ran an integrated steel plant in Kutch, Gujarat, to manufacture Sponge Iron, M.S. Billets and Re-Rolled products (Quenched and Self Tempered bars) with a captive power plant with an investment of INR220 crore. The project was installed at Village Sama Khyali, in Bachau Taluk, Kutch, Gujarat in an area of 122 acres of land. GML set up a 25 MW Captive Power Plant (Exhibit I) to ensure uninterrupted power supply at a cheaper cost thereby eliminating dependence on the State Electricity Board..............

Steel Sector: India

In India, large scale steel production started with the establishment of Tata steel plant in Jamshedpur in 1907, which actually started production in 1912. Afterwards, the large steel plants were established in Bokaro, Durgapur, Bhilai, Burnpur and Bhadrawati. Except Tata Steel, till 1990s, steel production was confined to public sector companies under control of Steel Authority of India Ltd. (SAIL)...........

Steel Sector – Angola

As of 2012, the steel industry, which was in the process of being privatized, appeared to be one of the most promising sectors for the Angolan economy. Two of Angola’s biggest steel processors – Fabrica de Tubos de Angola (FATA) and Metalurgica de Angola (Metang) – were managed by Indufer, a private Angolan firm. The revival of both these companies was stimulated by Indufer, which together had a joint capacity of processing 36,000 tonnes of steel per year by 2012. Both of them were operating at about 50% capacity............


A majority of steel demand in Angola came from construction, manufacturing, mining and infrastructure development projects (Exhibit IV). Steel TMT (Thermo Mechanical Treatment) bars were widely used in construction activity and as a core raw material for any concrete structure. Sale of steel bars was highly dependent on buildings, bridges, and dam construction in the particular geography...........

The Challenge

Though Angola appeared to be a promising market for GML, the challenges in entering this market were bothering Deepesh (Exhibit VII). As he pondered over the report submitted by the team that studied Africa, his predominant thought was that a well-planned market entry strategy should be made if at all GML decided to enter the Angolan market..........

Assignment Questions

I. What are the probable challenges to be faced by GML?
II. How environmental factors (internal and external) affect the business of GML?
III. ................


Exhibit I: GML Capacity

Exhibit II: GML Income Statement (INR Lakh)

Exhibit III: Finished Products of Steel Firms

Exhibit IV: Contributions to Real GDP Growth of Angola by Various Sectors (percentage points), 2009-2012

Exhibit V: Cement Production in Angola (a proxy for steel demand) (2008-2012)

Exhibit VI: Opportunities in Angola

Exhibit VII: Challenges in Angola

Teaching Note Preview

Garang Metal Limited: Market Entry into Angola



Garang Metal Ltd. (GML) is a steel producer and marketer, with the registered office in Kolkata. The company is currently operating from an integrated steel plant in Kutch, Gujarat, India, to manufacture Sponge Iron, M.S. Billets, Rolled products (QST bars) at the captive power plant with an investment of INR220 crore and an installed capacity of 25 MW. The setting up and successful operationalization of the Kutch plant created project management expertise within the firm in addition to its proven steel manufacturing and marketing skills. Hence an expansionist thought process, i.e. both domestic and international, crept into the firm’s senior management.

The liberalization (1991) of industrial policy and other initiatives taken by the Government of India has given a definite impetus for entry, participation and growth of the private sector in the steel industry. Internationally, the formerly war-torn country Angola is in the process of privatizing its steel industry. Currently two of Angola’s biggest steel processors – Fabrica de Tubos de Angola (FATA) and Metalurgica de Angola (Metang) operating at about 50% capacity – are managed by Indufer, a private Angolan firm. Therefore, GML management is in a dilemma whether to set up plants in Angola or not.

Prerequisite Conceptual Understanding

This case requires to be linked to the various frameworks of strategic management like SWOT Analysis, Porter’s Five Forces Model, Porter’s Generic Strategies and some other frameworks of responding to environment uncertainty like Opportunity and Threat Matrices, etc. Methods like Market-Build up Method, Multiple-Factor Index Method, Market Information Systems, Marketing-mix models, etc., can be used to evaluate the options available to the decision maker.

Case Positioning and Setting

The case can be used for different courses in undergraduate and post graduate levels of management education. It can be used for a course in Marketing Management as a new market entry strategy creation case or in a specialized course in International Marketing. It can also be used in the Market Research methodology courses focusing on different demand estimation and forecasting techniques. This teaching note is written to solve the case from a business environment perspective. Hence, it covers important aspects of environmental uncertainty for a manufacturer, demand estimation, forecasting under uncertainty and analysis of a market.

Assignment Questions

I. What are the probable challenges to be faced by GML?
II. How environmental factors (internal and external) affect the business of GML?
III. As GML, how would you tackle these challenges and evaluate different options? Create a market entry strategy for GML.


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Product code: STG-1-0045, STG-1-0045A


Garang Metal Ltd. (GML) is a steel producer (investment INR220 crores) and marketer, incorporated in 2005, with its registered office in Kolkata, India. The firm has grown rapidly in the past few years since its inception primarily due to its competencies including a strong focus on improving its portfolio, pro-active business management, work ethics and optimization of cash management. Currently the firm is looking actively at global markets to sustain its growth and provide adequate returns to the stakeholders. This case study focuses on one of GML’s current dilemmas – whether to expand its global footprint by exporting steel to non-traditional markets (like Angola) which could involve setting up manufacturing operations in the importing geographies in the medium term. The primary learning objective from this case would relate to deciding on first time (for a firm, GML in this case) market entry strategies into global geographies with information constraints, also the use of proxy variables (or surrogates) for forecasting/decision-making using available data in situations wherein adequate data may not be available.

Pedagogical Objectives

  • To identify the different external and internal environmental factors affecting a manufacturer in a new market
  • To learn the methods and frameworks to assess environmental uncertainty, and demand estimation
  • To evaluate alternative forecasting techniques in order to choose the right forecasting technique to develop forecasting models

Case Positioning and Setting
The case study can be taught in undergraduate and post graduate levels of management education for topics such as market scanning, demand estimation, forecasting, and market entry strategies.

* GSMC 2017, IIM Raipur

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