What are the take away for the PEB sector in the Budget 2023-24?
This budget reflects the government’s efforts in emphasizing the importance of promoting long-term development through investments in critical infrastructure such as railways and airports. By doing so, we will be able to generate employment opportunities and stimulate growth in ancillary sectors like steel and cement. Additionally, the focus on green infrastructure is a positive step towards meeting development goals more efficiently and in an environmentally conscious manner. The use of pre-engineered technology for green structures could help accelerate this process and save costs as well. Overall, this budget seems to prioritize sustainable, long-term development for the benefit of the economy and the environment.
How is the market for PEB industry shaping up in India? What are the emerging trends in the PEB industry?
Prefabricated technologies are becoming increasingly popular in the construction industry, particularly for large-scale construction. As prefabricated structures continue to evolve and improve, they are being used to construct warehouses, factories, multi-story buildings, industrial areas, etc. We are seeing an increase in demand for warehouses at the state and district levels as a result of India's rapid growth in e-commerce. Furthermore, highway connectivity is rapidly expanding, increasing the demand for warehouses in areas near highways. Industrial areas are being developed across states as a result of push from the government. Factory construction is on the rise, which has also boosted PEB construction. The pandemic highlighted the importance of building medical infrastructure quickly. As a result, we have seen an increase in the use of PEB in hospital construction following the pandemic. PEB is also being used in the re-construction of railway stations into airport models and in the construction of airports under the UDAAN Scheme. It is likely that prefab construction will continue to grow in popularity in the coming years.
How has your organization performed in the last three years?
We have done a lot of tie-ups and have developed many products suitable for the Indian market and we've been growing year on year. Our product has been now empanelled in a lot of agencies in the government, in the private sector and we have been doing projects across the country for multiple types of buildings. Our order books have grown significantly. Our revenues have also increased by 100%.
Which are your ongoing PEB projects in India?
Currently, our organization is engaged in several ongoing PEB (Pre-Engineered Building) projects throughout India, catering to both the private and public sectors in diverse industries. In the industrial sector, we are constructing factory buildings for clients like Dalmia, Sperene Compounding, SMCC, Manitou Group, Century Panels, and others. Furthermore, we are also involved in constructing warehouses for leading organizations such as NDR Warehousing, Ascendas, Palika Town, Aarush, Conserve Buildcon, Transolution, Safe Express, GAIL, and several others in the warehousing sector. In addition, we are also constructing multi-storey buildings, offices, hospitals, rooftop extensions, schools, and other projects for clients like L&T, SAM India, JSW, TCI, CPWD, TATA, and others across diverse sectors.
Which are the sectors that would drive maximum revenue for your organization in the next financial year?
In the next financial year, our organization expects to generate the most revenue from the industrial, warehousing, and logistics sectors.
There is a shortage of manpower in the infra-construction sector. How are you overcoming manpower shortages? What are the various skill enhancing training you provide?
Prefabricated construction is not extremely labour-intensive because 80-90% of the production is done in the factory and just 10-15% of the work is done on-site, requiring relatively little labour. When compared to conventional construction, this gives an advantage in meeting manpower shortages. EPACK conducts numerous training and skill development initiatives for our workforce. We also present numerous instructional videos to our employees, both on-site and in the factory, to educate and aid them in integrating new technologies and technical developments.
What are the challenges faced by the PEB players in India?
Steel price volatility is one of the primary challenges. When steel prices are fluctuating, it is difficult to maintain the initial prices given when taking on a project. The government should pay attention to this issue. The government can keep steel prices in the desired range by enacting new norms. Another issue is people's perceptions of the durability and strength of PEB structures. People have a traditional mind-set, believing conventional construction is better than prefabrication. PEB's durability and strength is at par to that of conventional construction. Many government PSUs have opted for PEBs over the last two decades. We foresee growing demand for PEBs in the coming years.
Your take on the government policies and regulations and the tweaks required to propel the sector?
The government of India is actively promoting construction and infrastructure development through various initiatives and policies, with a focus on sustainable and inclusive growth. India needs to adopt green buildings, built to internationally recognised standards that not just reduce energy and water consumption but also cuts down emissions. The government is promoting long-term growth. The government promotes large-scale construction through initiatives such as the Udaan scheme. Critical infrastructure, such as railways and airports, will contribute to long-term economic growth by creating job opportunities. The emphasis on green infrastructure is a welcome move that lays the groundwork for the adoption of green structures using pre-engineered technology, which will aid in meeting development goals much more quickly and cost-effectively. Sectors like real estate, railways, and airlines can benefit immensely from use of prefabricated materials for infrastructure development as that will lead to faster execution of projects. Lowering the GST or mandating such construction practises for government infra projects are a few steps that can be considered. Furthermore, introducing framework that includes safety regulations with providing specialised training for prefab structures under Skill India Mission can help create a pool of trained manpower for all infrastructure projects. The manufacturing and warehousing sectors in India appear to be quite promising as a result of several government programmes such as the PLI Scheme, Make in India, and so on. Many foreign corporations are already leaving China and trying to establish manufacturing facilities in India, which will boost the PEB sector in India.
What are your plans for the next financial year?
We intend to grow at a rate of 100% per year and to open a new plant in South India. We also intend to create sales offices across the country. We hope to also explore and enter the export market.
