← Business Models: Industry Specific (Industrials & Materials) (all topics)
Revenue concentration - explosives (single coal buyer)
What it is
Coal India is the dominant single buyer of industrial explosives in India, contracting supply through running contracts with a set of domestic manufacturers
Award is tender-driven and price-competitive among qualified suppliers
Impact on industries
- Delivers large, predictable volume that underwrites capacity utilisation and makes plant investment viable
- Single-buyer concentration gives Coal India substantial pricing power over its suppliers, capping realisation on the largest volume block
- Tender pricing means volume comes at the industry's lowest margin, so growth in this segment dilutes blended profitability
- Coal India producing part of its own ammonium nitrate makes it simultaneously customer and upstream competitor