India’s infrastructure thrust, stringent deadlines, reviving economy, rebounded real estate are all the positive signs that indicates promising growth for ready mix concrete (RMC) in India. Read on to know of this emerging sunshine industry
After water, concrete is the most widely used substance on Earth. That way google search says. Now, what is concrete? Concrete is binding agent. It binds bricks together and strengthen the constructed structure be it beams, columns or walls. How is a concrete made? It is made mixing cement, water and aggregates (rock, sand, or gravel). We all have noticed while passing through construction site labourers making concrete manually at the construction site. Then there are semi-automatic and automatic concrete mixer which are deployed onsite in mid-sized construction sites. There are trucks fitted concrete mixer which carries concrete to large sites. The concrete carrying trucks have to reach the site on time else the concrete inside the concrete mixer will be harden and of no use. For very large construction projects, such as construction of dams, roads and highways projects, tunnelling projects, large housing projects, concrete batching plants are widely used. These batching plants mixes cement, water and aggregates in huge quantities in a controlled environment with the aid of latest technologies. These plants are either stationary or mobile. The mobile concrete batching plant can be dismantled and assembled at a new construction site. From the batching plants, concrete is carried to the nearby site through concrete mixer truck.
Increasing market share
It is a fact without concrete construction is impossible. Now, with government’s stringent deadline for completion of projects the industry is more and more relying on ready mix concrete. Ready mix concrete popularly known by its acronym are manufactured in batching plant in a controlled environment to a given set of proportions, and then delivered to a work site, by truck mounted with mixers. According to a report Indian ready mix concrete market size was estimated at over USD 15 million in 2020, and the market is projected to register a CAGR of over 9% during the forecast period (2021-2026). The demand for ready mix cement is increasing. Take realty project or a redevelopment project in metros and capital cities which has to be completed within the decided timeframe as per RERA laws, else the builder will to pay heavy penalty. Because of the paucity of space to put a batching plant, concrete is carried at site through concrete mixer trucks. There is no alternative. If the builder goes for mixing concrete at site manually, he will definitely mix the deadline. This has given increase boost to RMC. According to TechSci Research, India’s RMC market was valued USD 2378.11 million in FY2020 and the market is forecast to grow at CAGR of 16.21% during the forecast period. “The RMC sector in India is growing rapidly at a pace of 15-20 per cent annually,” says Anil Banchhor, Managing Director & Chief Executive Officer, RDC Concrete. Like all other industry the RMC industry too was badly battered by Covid-19 has bounced back. The partial opening of lockdown along with resumption of infrastructure and realty project helped in the revival of RMC sector. “The RMC market is on its path to a steady recovery after the tumultuous first and second waves of the pandemic. The first lock down resulted in the stalling of all ongoing projects, construction activities had come to a complete halt. The initial period where everyone struggled to find a foothold amidst the pandemic impacted the industry significantly. Businesses were able to overcome the situation only after the lockdown was lifted, which led to the resumption of economic and construction activities across regions, and the building materials industry also got back on its track gradually. The overall demand is seeing an increase thanks to the resumption of construction projects across regions. Other construction activities are also resuming gradually,” says Ashwin Reddy, Managing Director, Aparna Enterprises.
“Despite the initial downturn due to Covid-19, the Ready-Mix Concrete or RMC market in India is now seeing steady growth. With a valuation of USD 2378.11 million in FY2020, it is expected to grow at a healthy pace of 16.21% by FY2026. This recovery is projected on the basis of the construction and infrastructure industry picking up as normalcy returns. This period has also seen a rising awareness of ensuring innovation through Value Added Products, especially in ensuring sustainable construction. With limited resources, concrete products with lesser carbon footprint would gain higher acceptance from both the consumers and regulatory bodies,” Prashant Jha, Chief Ready-Mix Concrete Officer, Nuvoco Vistas Corp.
New RMC in the Market
R&D is continuous process, so in research in RMC. There are few mindboggling researchers that are going on such as to come up with RMC keeps the house cool, at least two-degree cooler than outside. Then there are water absorbing concrete useful to drain out water during heavy rains. There are RMC which absorbs radiations. This type of concrete is very useful for hospital construction. Then there are concretes specially manufactured for projects near the sea. Godrej Construction has received the ‘Green Pro’ certificate from Indian Green Building Council (IGBC) for their RMC products such as Enviro TUFF, Xtra TUFF, Easy TUFF and other construction materials such as TUFF Blocks AAC, Recycled Concrete Blocks & Pavers making them beneficial for use in Green Buildings.
Nuvoco Vistas Corp has introduced a number of products under their concrete segment with the overall objective of ensuring high quality, durability, and ease of use while remaining cost effective. ‘we have introduced a light-weight concrete named, Structural Xlite. With a density of around 800-1,600 kg per cm3, it is significantly lighter than typical concrete which weighs in at a density of 2,400 kg per cm3. Lighter weight translates to ease of application and less utilisation of resources, bringing down the cost,” says Prashant Jha. The company has also introduced specialised versions of concrete to meet specific demands.”we have developed radiation-proof concrete solutions for cancer hospitals. Similarly, another variant can withstand extreme temperatures with improved resistance to water. We have focused on rationalising the usage of water and manpower in our concrete products. Our recent innovation in wet concrete is a step in that direction. It can be poured onsite without any additional water. At 8 hours, it also has a longer retention time than the typical retention time of 4 hours, allowing for longer transportation or application time,” says Prashant Jha.
RDC Concrete has wide range of product portfolio for providing high-quality tailor-made solutions for various needs. Greencrete, Duracrete, Crackfree, Naturecrete, Selfcrete, Tempcrete, Supercrete, Fastrackcrete, Fibrecrete are some of the tailor-made concrete offered by the company.
Roadblocks and Traffic Snarl-ups
Like all other industries, RMC industry too faces galore of challenges. “A key factor that impacts the demand for RMC is the increase in the prices of raw materials. Fluctuation in cement prices is also a key factor impacting the industry. Rising fuel prices coupled with cost rise in the supply chain transportation are also aspects that influence the industry’s revenue and growth. Decline in availability of cash or cash flow also affects the demand-supply chain for commercial and residential constructions which has direct impact on the RMC industry,” says Ashwin Reddy. The challenges expressed by Ashwin Reddy is seconded by Prashant Jha. “The biggest challenge facing the industry today is in the area of resource procurement, both in terms of raw material and manpower. There is a crunch in the availability of high quality materials, which impacts our production volumes,” says Prashant Jha.
Anil Banchhor too is in support to the views expressed by Ashwin Reddy and Prashant Jha. He opines, “One of the major challenges in Real estate sector in large metros, is the liquidity issue. This is sure to impact the RMC industry and all major players will need to refocus their growth plans for tier 2 and 3 cities which are still witnessing a steady growth.Another major challenge is uninterrupted supply of raw materials specifically aggregates of consistently good quality required to manufacture ready mix concrete due to several small size unorganised players instead of major branded players.
The race is to save the environment from release of harmful gases that degrades it. Carbon dioxide being one of them. Cement manufacturing release huge amount of carbon dioxide. Concrete being associated with cement authorities have regulated putting of batching plants outside the city limits. This is denting the profitability of RMC manufacturers. From batching plants transporting concrete through truck mounted concrete mixer (RMC trucks) to construction site in heavy traffic is a daunting task. Because of heavy traffic there are times when concrete gets harden and is rendered of no use resulting in loss for the RMC manufacturers. “Apart from the various government clearances which are required to start projects, growth of India’s ready mix industry has been baffled due to factors like traffic restrictions and congestion on the road are a major impediment for supply of the product which has a short shelf life of three to four hours from the time of production at batching plant. Setting up commercial plants in metro cities is a challenge due to space constraints and traffic regulations. The civic bodies need to allocate specific locations within the city limits to allow RMC operators to meet the growing demand of urbanisation,” says Anil Banchhor.
On setting up of batching plants outside city limits, Prashant Jha says, “Our other challenge comes from local norms and rules that can prohibit the establishment of batching plants in urban areas. It means that concrete has to be transported over long distances from the batching plant that are sometimes outside city limits. Given the perishable nature of concrete, this can be difficult to manage. It also increases the overall costs and the carbon footprint”.
Like other industries RMC industry too is facing shortage of skilled manpower. “The industry has also changed rapidly and needs skilled workers, which has again proven to be quite difficult, especially during the immediate aftermath of the pandemic when there was an overall shortage of labour,” says Prashant Jha.
India has recovered rather quickly from the Pandemic and is on the move. The recent milestone of one billion vaccination to guard its citizen from Covid-19 virus has come as an antidote to the reviving Indian economy. Time and again the state government and the central government has announced stimulus packages for the real estate sector. There are plenty of real estate projects that are in pipeline. A major chunk of concrete is consumed by the real estate sector. Then there are plenty of infrastructure projects which have to be completed with the given timeframe. The prime being twenty million housing for urban poor by 2022. It is in urban parts of India RMC will be in great demand. Paucity of space will limit mixing concrete on site and stringent deadlines will make RMC a must for completing projects on time. Then there are metro projects, 100 more airports to construct across the country by 2025, smart city projects, roads and highways projects, Sagarmala project, which will fuel the growth of urban infrastructure and construction development in the country, which in turn will fuel a promising growth for the RMC sector.
Abhijeet Gawde, Head of Business Development & Marketing, Godrej Construction, says, “As per industry reports, in developed countries, the penetration of RMC is approximately 65 to 70% as against the estimated penetration of 7% in India”.Here lies the opportunity to bridge the gap at least by a few percent. Projects are plenty. It is now up to the RMC players to grab the opportunity and move ahead.