While products like waterproofing compounds and solutions are checked out by home owners and repair workers alike, knowledge of the benefits of sophisticated Construction Chemicals products by the booming construction industry still needs to seep in, as
Varsha Trehan finds out.
Waterproofing, fast setting concrete admixture, restoration products, and flooring sealants - the terms fly around - familiar to the expert on one hand and seemingly just fancy cost additions to the rest of the construction industry. Broadly categorized as Construction Chemicals, they comprise a number of different products such as cement admixtures, cold-applied products, hot-applied products, membranes, acrylic & epoxy resins, and adhesives and sealants. While they sound like the hi-fi stuff to the uninitiated, these are now a part of our regular walls, floors and roofs.
Construction Industry Bond
Growth of the sector is given, by virtue of the symbiotic relation with the construction industry in India. Construction Chemicals is a sector benefiting from the use and access to foreign industry and the entry of foreign companies. "Today, several projects funded by multilateral agencies like the ADB and World Bank have made the use of good quality construction chemicals mandatory.
The market size of the construction chemicals is between Rs.1,500-2,000 crore in India" says
Mr Ramesh Kommajosyula, Managing Director, Varshitha Concrete Technologies. "The entry of foreign construction companies and use of foreign technology in the construction business has increased the growth rate of Indian construction chemicals industry. The significance of construction activities in the growth of economy of the country is evident from the government initiatives to support the infrastructure development by large scale investments in both public and private development projects. This has indirectly benefited the Chemical Construction industry as growth in infrastructure directly drives the demand for construction chemicals. The present market size of the construction chemicals industry in India is about Rs.1,600 crore and is rapidly growing at the rate of around 20%. The organized players control about 70% of the market share," says
Ms Anasuya Gupta, Chairperson & Managing Director, CICO Technologies.
Spurred by Infrastructure Project
"Construction Chemicals market will grow at a good pace in coming years due to numerous infrastructure projects spread all across the country. This includes power projects, transport networks, dams, irrigation projects, airports and sea harbors. Alongside, there are lot of commercial and residential developments. New developments and rehabilitation and repair of the aging structures, will continue to support the growth of the construction chemicals industry for a long time infuture" is the view of
Mr. Mangesh Patil, Head-Infrastructure, Construction Chemicals Division, Chembond Chemicals. "Increasing urban population and middle class income group coupled with increased economic activities and increased city size led to rapid growth in the urban travel and housing demand. Residential and commercial buildings are increasing day by day as well as infrastructure projects all are in full swing of construction, which are the leading of construction chemical demand" explains
Mr Rohit Varshney,Vice President - North India STP Limited.
Mixed Offerings
Across the sector business models vary from sole products range manufacturing, mixed products manufacturing to marketing a range of products. The format of the companies ranges from being local/regional entities to national and international players.
So if Tech Dry India is primarily a manufacturer of admixtures and waterproofing chemicals with their specialty range in anti-corrosion and anti-carbonation products, Buildtech Products and Technychemy manufacture waterproofing compounds in several forms, cement/mortar admixtures, and related products like bonding agents and surface treatments. They also market products like thermal insulation boards, steel fiber and PP fiber which are specialty products. CICO works on a similar line addressing application areas to include industrial & commercial, residential, shopping malls, sports complexes, hospitals, hotels, repair of old heritage and in almost all areas related to construction which require waterproofing. Huntsman Polyurethane India aligns with the Indian construction market with its insulation products that target energy saving and sustainable planet.
Chembond retail their products under the K-FIX brand and offer enhanced product lines for larger construction. They aim to become 'One stop chemical construction provider' with the addition of new products and meeting new demands. STP is more specialized and focused as a 'One stop solution provider for all waterproofing and damp proofing requirements' on the other hand, Varshitha does not directly manufacture the products, but applies the products in their restoration and rehabilitation projects.
Indirect Benefits Only
Continuing with the optimism is
Mr D.Ravi, Director-Marketing, Techny Chemy who sees a 30-35% growth rate this year, as the industry is seeing intense activity. However, he doesn't see a direct helping hand from the government. "I don't think the government incentives for infrastructure projects have directly favored the construction chemicals industry. Probably due to growth in the industry, the volume of business has increased. In the long-term also India has a good potential for construction chemicals." Mr Kommajosyula also expresses his dissatisfaction over government initiatives-"the government is not taking any major step so that Indian infrastructure industry works in favor of the construction chemicals industry. Except in opening of FDI in the industry, there is no significant step taken by the government."
Products to End-user Communication
Despite the obvious advantages in terms of time saving, durability, superior quality of construction and more acquired by applying a chemical system, process awareness of end users is a major hurdle. "At the 2nd International Construction Chemicals Conclave, Bengaluru where we were Associate Sponsors, it was shocking to be informed that an estimated 85% of industry members were hazy about the value of construction chemical application," says
Mr Akhil Kakkar, General Manager, Krypton Buildmat. Conveying the benefits over an additional cost, typically 1-2% of the project cost is required feels Mr Patil. "If some systems such as EIFS, PU insulation foam are used, it might increase by a percent or so. What is most important is that this 1-2% value products, actually decide the quality and life span of the whole structure. If clients, contractors and specifiers recognize this aspect, most of the problems occurring due to use of substandard quality products can be averted. Moreover, these products must be applied only by trained applicators and strictly as per the manufacturer's instructions. Cutting down on surface preparation, mixing methods, primers and curing, could result in major failures," he says. Mr Kommajosyula concurs as he tells us "The major challenges that we face are low product and process awareness of end users. It is really a challenging task to convince a customer to change his traditional methods and adopt new technology. There is no knowledge, understanding and seriousness by the decision makers in the industry. The greatest challenge is to educate the engineers responsible for on the projects."
Environment Break
The issue of chemical usage and environment sustainability is to some extent supported by the increased durability of construction. Industry players are increasingly aware of the need for investing in R&D efforts as well as better technologies. With the foreign fund inflow manufacturers are required to adopt global standards and practices in their production lines.
"Sustainable habitat is one of the fastest emerging trends in construction; it is enshrined in government and private sector policies. Internationally...," says
Mr G Anand, Country General Manager, Huntsman Polyurethane India. "There are some green products like our Krystol Internal Membrane, recyclable concrete and insulation products that contribute to sustainability in this segment," says Mr Kakkar. Manufacturers are also supporting this trend by revamping their processes and product lines. "Construction chemicals manufactured by us are all environment-friendly. These are manufactured under strict quality control and also with zero toxic waste. The introduction of energy conservation guideline by the government has lead to use products which really reduce the energy consumption. For example, some of our products such as Buildcote, Extruded Polystyrene rigid boards have been introduced keeping the growing demand in view and also to encourage green sustainable construction," says
Mr. S L Kothari, Managing Director, Buildtech Products.
"Effective insulation is a significant contributor towards sustainable construction. Huntsman, as a leading global producer of MDI (methylene diphenyl diisocyanate), and engineered polyols, which are used to make polyurethane insulation and play a key role in conserving energy and contributing to a sustainable planet" explains Mr G Anand. "Construction companies are focusing on environment-friendly construction chemical products. So all organized players are investing in R&D to provide the best environment- friendly products. The unorganized players are also planning to enter into the organized module," observes Mr Varshney. "All our products are environment-friendly which offer easy usage to our customers. Our extensive range of chemicals has been scientifically developed through our strong focus on R&D and working closely with customers, enabling us to provide innovative and practical solutions' says
Mr T.R. Sham Prasad - Vice President Sales & Marketing, Tech-Dry (India).
Balancing Costs and Profits
Cost pressures and rising raw materials prices are stress creators in the chemical industry. Heavy chemical companies are now mandated by the Bureau of Energy Efficiency to conduct annual energy audits, enforcing cost cutting in this direction. "The prices of construction chemicals are driven by prices of crude, cement and sand in particular. With the introduction of industrial byproducts and a lot of optimization in the usage, the overall costs have not risen, as far as the prices of these key indicators. Another reason is the market competition, which means that the margins have shrunk over the past 2-3 years.
There are of course some nagging availability issues. Recently, materials such as some polymers, isophorone based products and MDI have been in short supply, with prices skyrocketing" worries Mr Patil. "There is an escalation in the input cost which has to be admitted. This is due to various factors which are beyond our control. But we have not passed on the burden totally to our customers. A part of the burden has been absorbed by us. Importing the raw materials directly reduces the cost, the fear of mounting inventory cost is reduced by the high growth potential of the industry" is Mr D.Ravi's take. "The price war created by unorganized sector and local companies has created a threat to the R&D activities budget of the organized sector companies as the margins are low," points out Mr Kommajosyula. "The cost of raw materials has increased manifold with the increase in petroleum products. Since most of the raw materials used for making construction chemicals are to be imported from neighboring countries and many a times the quality are not uniform. At the same time, there has been an increase of manufacturers in small scale sector," says Mr. S L Kothari.
Reaching out to cost conscious, the customers is another challenge for the sector. "Indian market is extremely cost conscious. Customers demand the best quality at a very low price. The construction chemical manufacturing sector in India needs to access the vast market possibility available at the bottom of the income pyramid in the country. For this, they need to design, produce and offer at affordable prices products suitable for Indian conditions. This large potential market still remains to be exploited. The government should give incentive for R&D and the construction department should promote the latest technology and the companies producing the quality products for construction chemical industry" suggests Mr Varshney.
Skill Shortage
Besides providing quality and safe products, construction chemicals businesses are also faced with the challenge of adequate skilled manpower. "Construction especially waterproofing coatings, epoxy coating require efficient and skilled labor force to execute the job which is not available. It's a major cause for the slow growth of the industry. To overcome this in Technychemy, we are running an institute to train the people as good applicators and we use them in our project sites" says Mr D.Ravi. "There has to be continuing commitment to skill development and knowledge enhancement. Different types of construction and constructive problems have different solutions but in India we use few products only for all type of constructive problems. We have to educate the consumers about different type of chemicals and its benefits" feels Mr Varshney.
The Basics of Construction Chemicals
What are construction chemicals?
Specialty chemicals used in the building & construction process to solve construction needs like waterproofing, fireproofing, surface treatments, surface sealing and/or hardening, enhancing specific properties of concrete and many more. They serve as a major driver for safer and sustainable construction.
What is the benefit of using construction chemicals?
Construction chemicals at a very basic level add strength and improve construction quality, thereby increasing the durability of the structure. They also cut water and concrete quantities over conventional materials. In repair onsite projects, construction chemicals offer minimum breakage, finer finish in a short time and at a lower cost. Specialized products reduce building weight, increase safety, allow architectural design mobility and serve as environment protection shields.
What are the types of Construction Chemicals available in the market?
construction chemicals could be broadly covered under:
- Concrete and Mortar Admixtures
- Waterproofing Compounds
- Flooring Compounds
- Protective Coatings and Resins
- Adhesives and Sealants
Up ahead
"The industry which was new to construction chemicals in 1992 is now maturing fast and accepts new products and technologies with ease. Today with manufacturing spread in all the 4 regions of the country and excellent R&D infrastructure, Chembond's construction chemicals are used by the civil and infrastructure fraternity all across India" says Mr Patil. "There is an increase in new demand and awareness is bringing more business from the existing market. There is huge market for the repairs and renovation which has just opened up. The opportunities are plenty, but there is a big need of discipline in the industry. Like in developed countries, we need organized sector to rule this industry" feels Mr Kommajo- syula. "The industry is growing very rapidly at the rate of 20% per annum. Also as people become more aware of the importance of construction chemicals, the demand will go up. The Quality assurances will also play a major role as with varied options of construction chemicals and their applications" asserts Ms Gupta.
In the overall optimistic atmosphere for growth, it seems that those who offer quality, can meet international and environment protection standards in the long run will face the challenges and opportunities of tomorrow. Customer education to create self- awareness will remain an ongoing process, to increase the demand for standard products that come with technical application and after sale assurance. The challenge here is possibly, convincing the small project manager to pay for the quality, over the cheap unorganized sector offerings.
With construction technology looking for vertical growth, quite literally, companies need to gear up for R&D investment to match the international requirements as well. In this direction, the organized segment is already going forward with strength building investment. The chemistry for future growth seems generating the required energy.
