Elematic: Breaking the Traditional Mould

Finland-based Elematic is a leading provider of precast production technology, machinery and moulds in India. It provides structural design services, precast plant installation, and commissioning along with a team of Indian service engineers. It also provides production and installation training to its clients, and 24/7 after-sales support. Mika Reunanen, Area Sales Director, Elematic Oy & Shridhar Rao, Sales Head, India, Elematic India, discuss the growing acceptance of precast technology in India, given its many benefits over the traditional type of construction, which is time-consuming and labour-intensive.

How is the market for precast buildings growing in India?

Mika Reunanen: The precast market in India has been growing very well, especially in the last two years. We have been present here since 2005 and have set up a factory in Chennai (in 2007). Today, we have 33 big and small set-ups all over India. We are catering mostly to the construction companies to whom we provide a complete solution package from equipment designing to installing and supervising.

What advantages do precast and PEBs offer?

Mika Reunanen: Precast and PEB construction are both Prefabricated structures and have same benefits of speed, the difference is that pure steel structures are expensive compared to Precast structures, composite steel structures are flexible and easy to design for use in seismic areas such as India. Hollow core slabs paired with steel structures provide unique advantages in building construction. They can provide the highest amount of flexibility by providing long spans and thus architectural freedom on individual floors of a building.

These steel composite structures are especially suited for commercial and industrial buildings in India's built-up urban areas, where buildings need to be constructed extremely quickly in order to gain maximum rental income. With precast technology, all elements, including steel structural sections such as columns and beams and concrete structural elements like slabs and facades are delivered at site for quick installation, creating time savings in building construction projects.

Elematic has particularly been focusing on the quality of the end-products (slabs and panels) produced with technology developed in-house. In the hollow core production, Elematic extruders work on patented shear compaction and extrusion system. The unique technology saves a significant amount of concrete per square meter of slab area, as well as use of lower quantity of cement in the concrete, creating further savings.

Shridhar Rao: Precast brings an organised manufacturing set-up to construction. All the structural elements in a building such as slabs, walls, columns, beams, staircase and partition boards (a non-structural element) are produced offsite in a factory, and then brought to site, where they are fixed into place. The advantage is that you are breaking the critical path. The things which had to go in a series now gets distributed in different areas. Planning is happening in a different stage, manufacturing is going on in a different stage, as are excavation and construction. So, one gets the benefits of time, labour reduction, a better, quality-controlled product, and finally a well-finished building, which does not need plaster, does not leak, and is more durable.

Compared to cast-in-situ, precast uses less of everything – less cement, less water, less steel, and less labor. It produces less waste on the site and in the factory. This makes CO2 footprint of precast much smaller than in cast-in-situ construction. Precast offers a safer and healthier working environment. Material handling is easier and less scaffolding is needed, and the technology works in almost all environments – cold, hot, moist or dry. Precast buildings have been made successfully in seismic areas too though with specific designing skills and the connection details are different.

How is Elematic addressing cost issues in the price-sensitive market of India?

Mika Reunanen: We have made efforts to bring costs down for the price-sensitive Indian market for which we have developed a lower-priced product and are sourcing a lot of components locally. Elematic's ISO 9001:2015 certified fabrication plant at Alwar, Rajasthan, improves cost-efficiency of these heavy-duty products and significantly reduces their delivery time. In India, Elematic is the only turnkey solutions provider present in the country for over 10 years and has set up 33 precast installations, till date. This by the way represents more than 50% market share

We are planning now to keep parts stock in India, earlier our main stockyards for components were in Finland and in Dubai, so all the necessary supplies of spare parts and materials are coming from Dubai, and our local service personnel give prompt service.

What challenges has Elematic overcome in the Indian market?

Mika Reunanen: No doubt, there has been a lot of reluctance to shift from the unorganised way of constructing to the organised, probably because there is more effort required to do a job in a systematic way. Some projects were not large enough to construct in a precast way, plus, people did not have many examples of buildings made this way. But this is all in the past now. Today, there are 50-60 precast factories in India, out of which Elematic alone has set up 35 plants.

Shridhar Rao: Our clients have built a lot of buildings starting from 2 lakh sqft up to 15 lakh sqft. In Delhi alone, B.G. Shirke is doing 10,000 apartments every year and handing them over to DDA under the low cost/PMAY/EWS schemes. So there has been a lot of visibility for precast and the benefits it is bringing. There will always be naysayers for putting up a plant, but it all depends on the project(s) you have in hand. And if you have the timeline and a deadline to execute, then there can be nothing better than precast to help you doing the project in time and within the estimated cost.

What is the initial cost of setting up a precast factory?

Shridhar Rao: If you put up a Building material factory such as a block-making factory, you are looking at the capex only as an independent unit and maybe 2x the capex as Turnover.

In Precast, let's say you put ₹100 crore in a plant and you can do a turnover of ₹500 crores, which is 5 times the capex on which you are doing a turnover.

If you are constructing a project of 10 lakh sq. ft at a selling price of about INR.1000 per sq. ft, then you have a turnover of ₹100 crores, in which your Capex investment would be 25-30%. What's more, the life of your plant is for the next 20 years, so, the amortized cost over the life of the plant becomes miniscule.

I would like to add here, that precast, unlike traditional businesses, needs bold and aggressive marketing. At Elematic, our technology is geared towards buildings rather than infrastructure, as infra project does not require that kind of design and modularity as well as flexibility required in a precast building. We are providing technology for production of all the precast elements that the building industry requires.

Lack of aesthetics seems to be a common complaint against precast structures. What's your view on this?

Mika Reunanen: If designed well, precast can be made more aesthetic, for example, the Burj Al Arab in the Middle East has beautiful arches, balconies, etc, so every design is possible. Precast buildings can have as many aesthetics as the client wants. What people see more commonly is the unattractive box type buildings, but they are cheaper to build and are being adopted more in mass housing, as of now, where the client is unwilling to put a façade or design element of any kind. Finland has beautiful buildings like hospitals, apartments done in precast.

Precast can be made into any shape or color, even printed on and finished with several techniques. This together with longer spans gives architects and designers more freedom than ever.

What scope for growth do you see for precast technology in India?

Shridhar Rao: In India, precast came in the 70s but its adoption has been insignificant. It was only after 2010 that it began to gain interest. The adoption curve of any new technology takes time, but once adopted, people will simply start copying it. You will see that year on year, the number of precast plants has been increasing and they are doing a decent number of projects in varied types of buildings, along with new designs and in new geographies. I believe that in the next five years, adoption of precast will increase dramatically.

Mika Reunanen: One can restrict oneself to traditional types of buildings with the kind of materials we are getting, the labour constraint and lack of quality control. In The near future, I see big investors like KEF doing huge projects like the Lulu Mall alongside small companies doing medium-size projects. Since we have 50% local components and machineries in our plant, and the rest comes from Finland, we have managed to bring down costs, which will further increase acceptance of precast construction.

As of now, there is enough demand in India for us to have set up a manufacturing plant for making moulds, but maybe 10 years down the line, if India sees the kind of demand we expect, then we could definitely set up machinery plant here. Elematic India is also catering to Nepal and Pakistan markets.