Building material industry eyeing long- term growth

Building material industry is shaping up with improvements toward sustainability and technological factors
 The building material industry is set to grow larger with quality development. Bringing up new trends in products and materials which are more sustainable and environment friendly. Though the industry is facing some challenges in growth but is expected to overcome challenges. With the growth in EPC companies other industries like the building materials is set to advance on a larger level.
ACE Update presents a detailed analysis on building material sector. Industry experts share their views on current performance, upcoming trends, challenges and future outlook.
Current performanceThe current performance of a company showcases its potential in the market. With every year companies adopting various strategies to increase performance. However this year the Indian economy suffered a setback, the growth rate declined affecting the performance of companies.
Commenting on the current performance Abhaya Shankar, Managing Director, HIL Limited says, “It is important to note the Indian economic growth in 2013-14 had slowed down to a decade low of less than 5 per cent. Low demand, rupee depreciation to a all time high, low spend on infrastructure development, increase in input cost, moderate agricultural output and overall contraction in the manufacturing sector put pressure on price and volume affecting the performance of many industries.”
He further adds, “Although HIL too was impacted due to tough market conditions, it maintained its market share. We used this trying period as an opportunity to implement several strategic initiatives and realign the structure to be future ready.”
According to Sanjay Bahadur, CEO-Global, Construction Chemicals, Pidilite Industries Ltd, “As far as development in the construction chemicals industry goes, there has been a strong growth rate of 17 per cent per annum. Construction chemicals market has a huge growth potential due to the construction and manufacturing boom in India. Many newly developed products give better performance and results and hence there will be a shift in demand towards products offering better performance.”
Upcoming trendsTo grow forward every company needs to come up with new trends in products. Adapting to new trends gives rise to competition and growth. With new products which are sustainable and environment friendly at the same time effective and reliable building material industry expects a good future.
Mr Shankar observes, “The future looks very bright and promising for industries. Historically and statistically if you see the economy and the industry trends, the turbulence is experienced once in 4-5 years. Going forward, as per April 2014 world economic outlook, much of growth is expected to come from advanced economies. The government too is very keen on investment across sectors with a renewed focus on rural development.”
He further states, “In the last 6 years the AAC blocks for example, has grown 50 per cent CAGR. In the top 10 cities, the CAGR is around 10 per cent. The advanced polymer products industry is growing at CAGR 25-30 per cent. There are many new products that are entering the industry which are green, sustainable, easy to install and have long life. In a nutshell the industry has a great future.”Mr Bahadur says, “Green construction is the current trend in construction chemicals and waterproofing solutions market in the country. LEC (Low Energy Consumption) is a comprehensive waterproofing cum insulation system from Dr.Fixit. We have also developed an advanced high end range of waterproofing system. With 25 years of waterproofing and insulation warranty, this solution will take waterproofing to the next level as far as high end projects are concerned.”
ChallengesEvery success story has challenges surrounding it. When it comes to building material industry, the major problem it faces is lack of skilled professionals and appropriate knowledge about the use and benefits of products. Another challenge which the industry faces is the entry of low quality products and materials in the market.
Mr Bahadur feels unskilled manpower is a major concern. He says, “Lack of skilled manpower is one of the biggest challenges and a major constraint faced by the sector. This has been our primary challenge. The industry’s biggest challenges are low awareness regarding the benefits of construction chemicals, inadequate knowledge on proper usage of these chemicals and lack of enforcement of quality standards on construction activities. 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.”
Mr Shankar says, “The governments supporting or backing industries and providing relief especially for those which are predominantly rural product like the Fiber cement roofing sheets. Cost of the imported RM, legislature for using green building products etc. Low awareness of these new green products which are substitutes to the traditional one, and how they are VFM. Low entry barrier and non insistence of standards resulting in mushrooming of poor quality producers which will eventually impact the entire industry.”
Future outlookThe Indian market is expanding at a fast rate with a lot of opportunities for growth and development. There is an urgency to inculcate the right material usage, right dosage and the correct application to ensure optimum growth in the coming future. Speaking on the future plans Mr Shankar says, “HIL and its products are poised for growth in the coming years. The new restructuring has brought in more focus to individual businesses. Charminar will focus more on tier 3 towns and rural markets and retain its leading position. Aerocon pioneers in green building material and well known for innovative product line will expand its foot hold in other tier 2 and 3 cities. A good headway has also been made in exports.”
According to Mr. Bahadur, “The Indian construction chemicals market size is at ` 4,000 cr in 2014-15 which is pegged at about 10 per cent of the Chinese market. 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, we see this as an area where huge opportunities exist.”
EPC conceptEPC concept is driving quality work and product in the industry. With the world going Eco-friendly EPC companies will play major role in developing environment friendly solutions and will help the building material industry in quality development.
Mr Shankar says, “It is a concept which is catching up fast. It has many inherent advantages which the consumer is able to see, appreciate and derive the benefit. Today, time is money, lack of information, high reliability on recommenders, unsure of quality parameters, project budgeting, etc are the challenges faced by the consumer. EPC is a single point contact, ensures quality of various materials used, minimal wastage, guarantee of performance, optimisation of resources.” He further adds, “With EPC one can define the scope of work, duration of the project, insure against price escalation and most important is it is completely stress free. The EPC contractors will make sure that they use high quality products and build the Eco-system around building and sustaining a green habitat.”
———————————–EPC is a single point contact, ensures quality of various materials used, minimal wastage, guarantee of performance, optimisation of resources.
Abhaya Shankar, Managing Director, HIL Limited———————————–
——————————–Lack of skilled manpower is one of the biggest challenges and a major constraint faced by the sector.
Sanjay Bahadur, CEO-Global, Construction Chemicals, Pidilite Industries Ltd,

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