The market for ready-mix concrete is advancing at a slow pace in India as against the developed markets. Pushp Raj Singh, Executive Director Sales and Marketing, Dalmia Cement Bharat Limited – South anticipates the demand for eco-friendly products and structures to drive the sector
The evolution of ready-mix concrete (RMC) has been a major growth driver for the infrastructure and construction industries. Though India’s RMC consumption is low compared to western and developed countries, the RMC industry is progressing.. While RMC consumption in western countries is nearly 60 percent of the cement production, in India it is just 6-7 percent.
Snail paced Growth
Labour costs are a major cause behind the low demand for RMC in India. The cost of labour in western countries is very high, so minimal labour involvement and cost effective construction processes are preferred. This makes RMC a favorable option in such markets. Though India also has high labour costs, however, the cost of labour has not outgrown the option of RMC. States like Kerala are moving towards RMC products, and contractors too are demanding RMC. But overall, the demand for RMC in India remains flat, mainly due to the shortages. The RMC market normally follows the cement market; with the cement market remaining on a flat index, a sluggish growth is being witnessed in the RMC sector.We have grown about 7-8 percent in the fiscal last year in the RMC sector.
The rising concern over carbon emissions and adoption of eco-friendly technologies in the construction process has driven the demand of light weight products, ensuring dust prevention. We have also seen the industry move towards higher grade concrete products. Many large infrastructure investors now prefer such products. These products are particularly gaining prominence in the construction of large of infrastructure projects. However, the overall demand for such products is still at a nascent stage, driven by the cost efficiencies.
Dalmia Cements is currently upgrading our cement, which will be utilized for highend specifications and will be launching similar products in the future. This product will be used in large infrastructure projects, including high-rise structures. Dalmia Cement products are already being supplied to the Chennai and Kochi metro projects.
Dalmia Cements focuses on maintaining and developing its manufacturing plants and products by considering the requirement of energy efficiency. Eco-friendliness is maintained in the products from the source itself. Focus is also emphasized on the utilization of power resources, coal and lignite consumption, wherein Dalmia Cements focuses to remain on the Green Path.
Benefits of Recycled Concrete
The infra-construction sectors are evolving constantly, and we anticipate a situation where the companies will opt for recycled concrete and eco-friendly products. RMC is pre-mixed, can be produced directly on-site and offers much higher consistency across projects. Many developers are moving to RMC products due to the time and cost benefits.
Tier-II and tier-III cities in semi-urban and rural regions are expected to be the major demand regions for RMC products in the future. We see a 5-6 percent growth from such regions. Dalmia Cement is already receiving requests and enquiries from these regions for developing RMC manufacturing units. Exploring this potential Dalmia Cement is in the process of developing an additional unit in Belgaum, Karnataka. The plant will manufacture cement which will be supplied to RMC and will have a 2.5 million tonnes capacity. The manufacturing unit is expected to commence its production by July or August this year.
The real RMC demand in India is driven by the real estate sector, which contributes 76 percent of the total RMC consumption. After this are the infrastructure and industrial sectors, that contribute about 20 percent of the total RMC consumption. In addition, the growth of power projects, especially hydro power projects, has positively impacted the RMC market in India. Projects involving dam construction that require huge amounts of cement prefer RMC. Infrastructure and real estate plays a crucial role in driving the demand for Dalmia Cement products, wherein 25 percent is raised from the infra projects and the balance is driven by the realty sector.
The RMC sector in India, due to the flat demand in cement consumption, has been progressing at a sluggish rate. Availability of credit remains as a major hurdle for the RMC manufacturers in India. The delayed execution of projects, lack of fund availability and shortage of aggregates further add pressure on the RMC market in India. The ease in availability and inflow of credit facilities can contribute to accelerate the demand and supply of the RMC market in India. A stable government, policy initiatives and a more proactive approach to fast track infrastructure projects can surely fast track the demand and supply of RMC in the future. West Bengal, Bihar and Gujarat were the major growth areas for the industry in last fiscal. Opportunities from the North-Eastern regions, due to the large infrastructure projects being executed, have also brightened the RMC market.
Dalmia Cement has set up a plant in the north-eastern and enjoys a strong presence there. Its production capacity there is about 2 million tonnes and Dalmia Cement will soon develop a plant there. In the south, the Dalmia Cement plant has about 9 million tonnes of production capacity, and with the start of Belgaum unit, it will rise to 11.5 million tonnes. Dalmia Cement adds a new product after surveying the market. Once the Belgaum plant starts, a new product will be added in Dalmia Cement’s portfolio. Dalmia Cement recently re-launched the Ultra with HALC technology in August 2013 and is receiving positive response from the market. In addition, two other products are streamlined to be soon launched. Dalmia is among the few manufacturers who offer oil-well cement, supplies cement for railway sleepers. The cement for railway sleepers is based upon a green initiative and replaces the need for wood as the construction material. India is a developing country, the growth in GDP supplemented with new initiatives and investments on the infra projects and loosening of credit will accelerate the growth pace of RMC in the future.