PEB sector which was doing comparatively better in Pre-covid times has now been hit by lack of projects. Pandemic upsurge, increasing steel prices, frequent lockdowns has restricted movement of goods, man power to sites. All is not lost; healthcare and data centers are the emerging as growth drivers
There is an increase awareness of pre-engineered building, not only in India but world over. Any why not! This is the fastest way to construction a warehouse, to very complex industrial buildings to high rise structures. Compare to other building materials – precast, concrete, cement - are quicker to construct, are environmental friendly, are constructed entirely of steel sheet, They can be easily re-locatable compared to conventional brick & mortar construction. “We provide steel buildings that suit to the requirement of that particular industry segment as PEB is one of the advanced construction technology where in each and every building is unique in nature and highly customized as per the customer’s requirement. These buildings are simply engineered – design & drafting using very high end engineering softwares, manufactured with very sophisticated advanced machinery at our manufacturing facilities under quality controlled environment, transported in long trailers as the sections are very wide and have larger heights and installed at the site by using simple nut & bolt connections without any welding or manual work. Each and every building is very different with the consumption of steel varying which can be determined only after the building is designed with all the parameters incorporated into it,” says D Raju, Managing Director & CEO, Kirby Building Systems & Structures India.
“Shifted Focus on PEB is due to its significant cost benefits and reduction in construction time of manufacturing plants, warehouses, etc, compared to that of traditional construction model,” says Puneet Mathur, Business Head, Tata BlueScope Steel Building Solutions. Compare to other building materials steel is versatile in nature, tensile, highly durable, recyclable, good scrap value and can withstand external pressures such as earthquakes when used in the form of a building. It has a high strength to weight ratio which means it has high strength per unit mass. So no matter how large the overall structure is, the steel sections will be small and lightweight, unlike other building materials and have a good load carrying capacity. Steel can be easily fabricated as it is flexible. It can be molded into any shape without changing its properties and also converted into sheets or other products as per the design. Steel sections can be produced off-site at shop floors and then assembled onsite using nut & bolt connections. This saves time and increases the efficiency of the overall construction process resulting in faster project completion.
PEB - An excellence in making
In the initial stages PEB was not readily accepted. It was an excellence of two decades for PEB to gain acceptance. As per the available data, back then in 1990s, PEB was not manufactured in India, but were imported mostly from the Middle East. The first installation of PEB in India was in Greater Noida, Faridabad and Bengaluru. Since, it was very costly, the market for PEB remained very low confined only to couple of orders in a year. Indigenous manufacturing units were established in the 1999-2000 and then on interest started to pick up. The earlier clients for PEB were for warehouses. From simple warehouses, today PEB is practically used for construction of complex steel buildings/structure like shopping complex, sports clubs, schools or colleges, aircraft hangers, multi-level car parking, multi-level cold storage, metro stations, and many more. “In the early 2000, warehouses were the initial driver for PEB but over the last two decades PEB has ventured into many other applications for different industry segments. Kirby India has grown manifolds over the last two decades executing simple box like buildings for warehouses to very complex industrial buildings to high rise structures,” says D Raju. Kirby India has already ventured into construction of commercial buildings either completely in steel or composite form which is slowly being accepted by builders & developers as being witnessed in major cities across India. The company has already executed some high-rise buildings for commercial & residential segments and is currently executing over G+20 floors commercial office buildings and many more are in the pipeline. As the structure went from simple warehouse to complex steel structure, so did the design. From manual drafting the industry shifted to advanced user friendly computer-aided BIM software. These softwares are bundled with features to determine the strength and thickness of available steel, the building loading criteria like wind resistance, snow loading, seismic zone, and a host of other loads that the building may be subjected to. Softwares such as ETABS and STAAD are used to analysis and design the structures as they are faster in giving the outputs. TEKLA software is widely used in the PEB Industry for structural steel detailing, connection designs, and for fabrication, etc. “The company uses its proprietary software for design and detailing of PEB structures, in addition to the standard packages which include AutoCAD, STAADPro, ProSteel, Tekla, ETabs, Bocad, etc. and allows all the buildings to be customized as per the unique building specifications of the customers,” says D Raju.
Increasing steel prices affecting profitability
In the last couple of months steel prices have been increasing sequentially. This has affected the profitability of PEB projects. Steel is the major material that is used in PEB construction. PEB players take up projects calculating the current steel prices and pick up the orders. By the time the deal is finalized and the customers conclude the site mobilization which takes a reasonably long time, the price of the steel shoots up. By now, the cost price of the raw material has shot up compare to the calculated price. The end result, either the PEB players end up with less profit or it a loss for them. Currently this is one of the biggest challenge the industry faces. “One of the major challenges that the industry is facing over the last few months is with regards to the steel prices that have shot up by more than 70 per cent and is continuing the increasing trend every month. This has put a dent to the speedy implementation of projects specifically in the industrial & infrastructure sectors as getting price increase and availability of raw material has also become difficult. We, as an industry are looking forward to government support in such a way that more preference is given to the domestic steel consumers instead of exporting the steel and support the local industries by supplying steel at an economical price,” says D Raju.
“The volatility observed in steel pricing in recent past and at present is unparalleled. Of-course there are reasons for the same, however this does pose a challenge to PEB projects as these contracts are generally fixed price contracts and with stiff timelines. If there are availability and supply chain related issues due to lockdowns/ restrictions it adds to the complexity,” says Puneet Mathur.
Skilled manpower on decline
The PEB industry is facing shortage of skilled manpower which is a vital necessity for the growth of the industry. To overcome the paucity of skilled manpower the industry part is imparting training to technicians/engineers on a continuous basis to upgrade their skills. Seminars and conferences are regularly organized to enhance the knowledge of PEB technicians/engineers. “Industry is also facing challenge in the form of availability of skill sets, whether it is in manufacturing or engineering or in designs pertaining to construction. We must constantly and continuously be updated with the latest technologies. Professionals have good qualifications, but they only know about old, conventional fabricated structures and are not up to date with the new advancements. We are working with educational institutions like NIT, NICMAR and other engineering colleges and plan a good course on a national level so that the students are updated with the latest technologies and advancements and are thus ready to join the industry as professionals. Another important aspect which is not a challenge per say but is a must-do is the continuous improvement on the safety at job sites. We make sure that the erectors, builders, etc, are continuously updated about the quality and safety standards as per the global standards,” says D Raju.
“At Tata BlueScope we invest a lot in skill development of our teams. We have qualified teams to support our front end as well as back end technical functions like design/detailing, etc. We have a dedicated team of skilled manpower tied up with our certified erectors. On time to time basis we are nurturing and developing the skill sets of the team for new solutions, technologies and with tools to face the external challenges. This is a continuous process for us,” says Puneet Mathur.
Growth may take a hit
Currently, like all the industries, the PEB industry too is going through a period of uncertainty. “There are challenges ahead of us, as market sentiments are fluctuating due to uncertainties surrounding the pandemic, decision making has slowed down a bit due to economic factors and also current pricing scenario. With complexities in supply chain, on-site manpower, etc, induced due to localised restrictions the efficiencies in manufacturing and construction at industry level may get affected,” says Puneet Mathur. Kirby Building Systems & Structures India
“Post relaxation in lockdown which was being lifted in phases we continued to face many problems such as supply chain constraint because of local restrictions on movement of goods, manpower shortage for construction sites, etc, for nearly three months,” says D Raju. However, we believe healthcare infrastructure will provide succour to the PEB players in this difficult time. “The surging number of cases have put an unprecedented strain on our healthcare systems and infrastructural facilities. Reinforcing and accelerating the need for state-of-the-art, compliant, hygienic Grade A healthcare centres in India. Given the current situation, the healthcare facilities need to support an overwhelming number of patients, with adequate facilities maxing out on space or service by ramping up Covid special hospitals on a war-footing. Here, pre-fabricated structures offer value solution helping us meet with the growing demands of healthcare expansion with a quick turnaround time. Enabling speedy construction and flexible design specification, these modern and modular structures have gained much value within the sector as against conventional structures,” says Puneet Mathur.
It is not as if the whole economy is in deep slumber. The government has allocated huge amount for the development of infrastructure in the country. Work from home culture has driven huge demand for internet which in turn has increased demand for setting up data centers. “Other sectors which are expected to drive demand for PEB include Fast Moving Consumer Goods (FMCG), Agro Related, Pharmaceuticals, Defense, Tyre, Textile, Data Centers, etc. Demand for PEB in the public and the government sector as well is rapidly increasing including low cost housing where government is adopting prefab technology for speedy implementation,” says D Raju.
But all depends on Covid-19 positive cases decreasing considerably and the government vaccinating all its citizens.
