How has your organisation preformed in pre-Covid-19, in Covid and post-Covid-19?
We did very well in pre-Covid-19, especially two years before Covid-19, ie, 2018-19 and 2019-2020. These two years business was very good and was picking up pretty well. And then with Covid-19, followed by lockdown, business started to slow down. From August-September business started to gain speed and now again due to the second wave there is slowdown in business activities. The last one year for our business has been pretty good.
How are you adjusting to the ‘New Normal’?
We are changing for the better to suit to the ‘New Normal’. Physical meetings have been replaced by electronic meetings. Since our nature of business is Pre-Engineered Building (PEB) construction, most of our work is at manufacturing shop floor or work done at site.Workers and engineers have to be physically present. We are taking all safety precautions to ensure our people don’t get infected by Covid-19. We have provided safe houses for our workers at the site. We have also arranged for transport facility and now our top priority is to get everyone vaccinated.
Can you please share with us the market share and growth rate of PEB industry?
PEB sector is growing very fast. There is a huge demand for PEB coming up from warehousing and e-retailers. Lot of foreign companies are setting up their offices in India. There is lot of export demand too. I think PEB sector will do well because post Covid-19, people will prefer less involvement of workers and labourers in construction activities on site. This will give huge impetus to PEB industry as PEB is readymade at manufacturing site and installed on site with few workers.
What are the emerging growth drivers for PEB sector?
Number one is foreign companies are setting up their offices in India, which they are doing in very large numbers. This is across board for different sectors.Number two is e-retailers like Amazon, Flipkart. They are very big drivers. They are driving warehousing sector in India, Number three is the FMCG like Hindustan Lever, P&G and paint companies like Asian Paints, Berger. Except the Auto industry which has slowed down every other sector is growing.
What is your take on healthcare as an emerging growth driver?
We are exploring healthcare. But the problem is for constructing a healthcare facility say a hospital, people tend to go for conventional construction of bricks and cement. These facilities are mostly constructed by the government. Covid-19 has shown us how bad our healthcare infrastructure is. The government is keen on faster building of healthcare infrastructure to curtail the growth of Covid-19. For that to achieve in shortest possible time PEB will play a major role. In remote parts of the country, it is very difficult to construct healthcare with conventional materials. We are concentrating on building healthcare facilities and for that we have approached all the state governments. We have done various hospitals all over the country and now the number will grow astronomically.
How does the volatility in steel prices affects PEB projects?
I have never seen steel prices this high in my life. The prices keep on increasing. Sometime increase in steel prices happens in a week. It makes doing business very tricky; but we don’t have any choice. We have to function because steel companies enjoy certain kind of monopoly.These companies work like a cartel. It is like a commodity. Commodity prices go up and down based on international prices. There are very few companies in India that make steel. Imported steel is more expansive than Indian steel. And we think it will only go up right now. We have no choice.
Does lack of standard codes affect PEB projects?
Standard codes does not affect PEB projects because customers choose their standard. PEB is primarily made with American standard. It is an American invention. Depending on the size of building and the buyers they choose their own standard.
What are your expectations from the government for the PEB sector?
We pay 18 percent GST on the building, but when we bill it to the client, he does not get any credit. While he gets credit on the machineries and raw materials he buys, it is only on factory and warehouse building he does not get GST. I think it is unfair. When you are taking GST on rental and from the products that are manufactured there, then why should the chain break at the input stage. Factory building is a major cost for most of the industries and for small and mid-sized companies it is much bigger than the capital goods. We have been representing about this with the government.It was also challenged in the court and the court has ruled against the government.
We are losing out business because of this. The unorganised sector is taking advantage. To avoid paying GST of 18 percent clients are increasingly preferring unorganised sector. Here, payment is made partly by cheque and the remaining in cash.
What are your future plans for the growth of the company?
We are expanding more. We are planning to buy new factories. We feel there is a big future coming up in the infrastructure sector, in fact, in all sectors. We believe whatever setback was there in the last one year was only temporary. We are planning for the future. We are already expanding our facilities. We are planning to set up new plants. We are very optimistic and positive. The industry is going to grow.
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