Waterproofing, a niche segment of the chemical industry, is expected to grow rampantly
The construction chemical industry in India is growing rapidly, and waterproofing, a niche segment of the chemical industry, is picking up the pace too. Time and again neglected or forgotten, waterproofing is one of the most essential jobs involved in building a structure. Waterproofing system plays a major role just like any other parameter when it comes to constructing a structure because waterproofing is an important feature when it comes to the durability and safety of the structure.
Here`s a thorough analysis on waterproofing industry: the current market scenario, the challenges, the growth drivers, and the future outlook.
Current statusDue to the rising infrastructure and construction activities in the country, the waterproofing industry has definitely shown positive growth; and this growth has opened a far-reaching demand for technological advances in waterproofing materials and products over the years.
FICCI observes that the market size for construction chemicals has the potential to grow to 5,000 crore over the next few years if the industry promotes itself professionally and increases the level of awareness in the construction industry. Sunny Surlaker, Head Admixtures Division, MC-Bauchemie (India) says, “Constructors should be convinced that usage of construction chemicals is a benefit and not undue cost. Further, based on statistics, waterproofing systems form roughly 13-14 per cent of our industry sales figure. With a growing industry, we anticipate the demand for waterproofing systems to grow positively.”
Mostly, waterproofing is not given much importance in the initial stage of a building construction. However, Deepak Kanitkar, GM–Technology and Business Development, Construction Chemicals Division, Chembond believes waterproofing is the next biggest market after admixtures. He observes, “Whether it is repair or new construction, there is a lot of demand in waterproofing products such as sealants, waterproof coating, membrane, polymers and other repair material.”
Racy Sidhu, CEO, Kryton Buildmat Co. Pvt. Ltd says, “The waterproofing industry has been growing at an estimated 9.2 per cent CAGR per year; as compared to the 5-6 per cent GDP growth this is almost double the annual rate and is only set to go up. Year 2014 – 2015 is a pivotal year for the economy due to high hopes being begged on a NDA-led government.
Business is looking forward to industry reforms to increase foreign direct investment which will ramp up construction and large infrastructure projects.”Waterproofing market in India is at a very premature state, since the bulk of the construction sites use traditional methods like brickbat coba, mud puska which have their own limitations. Hence, there are huge opportunities exist. However, Sanjay Bahadur, Global CEO, Construction Chemicals, Pidilite Industries observes, “There is an urgency to inculcate the right material usage, right dosage and the correct application to ensure that we create healthy structures.”
Pidilite believes that green construction is the current trend in construction chemicals and waterproofing solutions market in the country. The company has launched LEC (Low EnergyConsumption), a waterproofing-cum-insulation system, to meet the need of complex high-rise structures.
Market statusTalking about the market share Mr Kanitkar says, “If the construction chemicals market size is 2,500 crore, the waterproofing market should be of 700 – 800 crore which includes waterproofing materials, membranes.”
Mr Sidhu observes, “International brands continue to dominate the space. Quality, longevity and ease of application will continue to influence product choice.”
Commenting on the market size and growth status Mr Bahadur said, “The Indian construction chemicals market size is at 4,000 crore in 2014-15 which is pegged at about 10 per cent of the Chinese market. As far development in the construction chemicals industry goes – there has been a strong growth rate of 17 per cent per annum.”
Key challengesThough the waterproofing market has witnessed significant growth during the past, it is facing a few challenges. Lack of awareness on efficient use and quality of waterproofing materials is the major challenge. Also, customers do not prefer spending much on this term and prefer to go for cheaper solutions. Beside this, lack of skilled manpower is one of the biggest challenges and a major constraint faced by the sector.
According to Mr Bahadur, “About 85 per cent of contractors and builders are not aware of the key advantages of using construction chemicals and have limited knowledge on their proper applications.” Dr. Fixit provides training and supervision at site for right application practices.
Experts also feel waterproofing is still a neglected job in most of the buildings – whether it is residential or commercial. According to Mr Kanitkar workmanship and availability of funds are probably major issues. He said, “Waterproofing comes at the end of the construction, people are exhausted in their budget at that time and they don’t have enough money to do waterproofing job. So lot of people make compromises and the quality of material used are not that good. Workmanship too is a big issue in India.”
According to Mr Sidhu, “The quality of construction in India is improving with time, but still lags from international standards. Engineers, governments and leading construction companies are demanding higher quality standards. It is difficult to put a price on quality and purchasing departments are trained to drive price in a downward direction. This, at times, allows inferior products to be utilised in projects which ultimately negatively affect the Indian consumer. There is also a significant amount of misinformation provided which creates confusion instead of proper selection of the right waterproofing products.”
Commenting on the challenges the waterproofing industry facing today, Mr Surlaker opines, “The focus in waterproofing has been exclusively on materials and guarantees. Correct materials, trained and skilled manpower and correct application machinery and tools are keys to excellent waterproofing. Across the general market, a lot more awareness and training needs to come into play to ensure durability of waterproofing and structures. This points to the fact that awareness on correct usage of construction chemicals still poses as a challenge.”
Growth driversAccording to a report on construction chemicals published by FICCI in January 2013, the Indian construction opportunity is expected to grow by 1.9 times over the next five years. Customer awareness and company specific activities such as innovation, market reach and focus on technology will act as growth drivers for the waterproofing segment.
Mr Sidhu believes new product development of greener and more economic products is one of key growth drivers. He said, “Bitumen membranes that once ruled the waterproofing landscape are now considered environmentally unfriendly. Across the world green is the new motto and construction companies are adjusting to the demands of sustainable products.”
He further added, “Customer awareness and demand for international standard of living are also driving the growth. They want dry and mildew free living spaces that are healthy and vibrant. Urbanisation too is leading to the need of simpler and more economical solutions that last a lifetime.”
Mr Surlaker says, “From an industry perspective, fresh investment into construction will provide a boost to the industry as a whole and also to the waterproofing segment. We also believe with the advent of our Construction Chemicals Manufacturer’s Association, our industry is pushing forward the drive for awareness on correct usage of construction chemicals. Once this wave catches on, it would be a big boost in driving the growth of our industry, the waterproofing segment and our company forward.”
Future outlookDue to infrastructural development in India, waterproofing industry is being considered as a flourishing industry. With companies taking initiatives to promote the idea of efficient use and quality of waterproofing it is expected the industry will grow rampantly in the near future.
Mr Sidhu states, “The future looks bright especially for crystalline waterproofing as more and more architects and developers set out to create beautiful buildings that they are proud to put their names on. The companies that will win satisfied customers understand that quality, integrity, service and professionalism are the key differentiators. Customised solutions and new products are the way forward in today’s India.”
Commenting on the future outlook for the waterproofing industry, Mr Kanitkar says, “A lot of old structures will come for repair. Also, seeing the current quality of construction, the cycle for repair will be shorter. So, there will be higher growth for waterproofing materials than the other products in construction chemical range.”
“With the growth in construction, the market slowdown is receding. The future outlook for the industry and waterproofing segment looks extremely positive,” Mr Surlaker concludes.
Sanjay Bahadur, Global CEO, Construction Chemicals, Pidilite IndustriesThere is an urgency to inculcate the right material usage, right dosage and the correct application to ensure that we create healthy structures
Racy Sidhu, CEO, Kryton Buildmat Co. Pvt. Ltd Year 2014 – 2015 is a pivotal year for the economy due to high hopes being begged on a NDA-led government
Sunny Surlaker, Head Admixtures Division, MC-Bauchemie (India) With the growth in construction, the market slowdown is receding. The future outlook for the industry and waterproofing segment looks extremely positive
Deepak Kanitkar, GM–Technology and Business Development, Construction Chemicals Division, Chembond…there will be higher growth for waterproofing materials than the other products in construction chemical range