AAC Blocks: Building A Formidable Future of Construction

The AAC (Autoclaved Aerated Concrete) market in India is experiencing significant growth. The global market size (2022-23) stands around USD 19 bn (Rs.1.5 lakh cr) and is poised to grow at 6.2% over the next 5 years. The Indian market size (2022-23) stands around USD 0.5 bn (Rs 4,000 cr) and is poised to grow at 15-20% over USD 1.3 bn (Rs 10,000 cr) in the next 5 years. In India, the demand of AAC Block has grown immensely in the past few years and continues to grow at around 8-10% every year.

In India, AAC, which was a meagre Rs 50 crore industry in 2008, has grown to about Rs 4,000 crore (CAGR of 58%). It is expected to reach — Rs. 8,000 - 10,000 cr in the next five years at a CAGR of 15-20%. There are more than 150 AAC Block plants in India with total installed capacity of around 12 million cubic meter per annum. As the country continues to urbanize and prioritize sustainable construction, the market for AAC Blocks is expected to remain strong.

Recently, the prices of AAC Blocks have increased by Rs 200 - Rs 300 per cubic meter. A number of factors have contributed to the recent increase. Construction activity, which was slow in the first half of FY25 due to the Union Elections in the first quarter and the monsoon season, has picked up a great deal and with that demand of AAC Blocks is also gaining momentum. Raw material costs, especially that of cement, lime, coal too has firmed up with surge in construction activity and with infrastructure projects getting back on track post-monsoon. Looking at the current scenario and robust demand growth of AAC Blocks, prices are expected to increase further in the coming days.

Why AAC Blocks are becoming more preferred over Red Bricks

• While penetration of AAC blocks in building application is 8-10% of the industry, 75-80% of the industry is still dominated by Red Bricks, hence, the switch to AAC blocks though gradual is gaining momentum.
• AAC blocks are a preferred choice over red bricks due to their unique combination and superior build properties like strength, low weight, thermal insulation, sound absorption, unrivalled fire resistance, etc
• Due to surge in demand and increasing penetration, the price of AAC blocks has gone up by Rs 200-Rs 300 per cubic meter and is expected to rise further
• Indian AAC blocks market is anticipated to register a CAGR of 15-18% in the next five years to reach Rs 8000- Rs 10,000 crore.
• India is likely to witness an investment of around USD 1.3 trillion in housing over the next seven years, leading to rising demand for AAC blocks.

Furthermore, the conversion from brick to block is gradually gaining momentum. A number of factors are playing an important role in making AAC Blocks the choice of building material. Few of these factors include increase in cost of red bricks and the rapid infrastructure development. In metros, builders and top developers have shifted to AAC Blocks with an adoption rate of 60-70%. Demand from Tier II and the industrial segment is going strong. In Tier II cities 40% of the construction industry has shifted to AAC Blocks.

The Government’s impetus through numerous infrastructure and housing projects and regulations to use eco-friendly construction material under its net-zero emission goal, are the primary factors for growth of AAC Blocks. India is likely to witness an investment of around USD 1.3 trillion in housing over the next seven years. The Indian government’s ‘Housing for All by 2024’ is also a major game changer for the industry. Projects such as Pradhan Mantri Awas Yojana, Police Housing, Kanya Shiksha Parishar, etc. where the Government has made it mandatory to use green building materials like AAC Blocks, Fly Ash Blocks for all its infrastructure projects.; this is a big positive for the industry.

Red Bricks vis a vis AAC Blocks

Since decades, red bricks have been a traditional choice due to their availability and affordability. However, AAC Blocks are proving to be stronger, more sustainable and durable alternatives to red bricks. AAC Blocks fare better than red bricks when it comes to the following parameters: Compressive Strength: AAC Blocks generally have higher compressive strength compared to red bricks. AAC Blocks, which are manufactured in specialized factories, offer compressive strengths of 3 to 4.5 N/mm². In contrast, red bricks, widely available but less engineered, provide compressive strengths of 2.5 to 3.5 N/mm².

Durability: AAC Blocks are designed to be more durable and homogeneous, enhancing the overall strength of structures and minimizing waste and construction defects. Red bricks, being more fragile, can lead to higher wastage and maintenance needs.

Utility and Workability: AAC Blocks are lighter and thinner than red bricks, making them easier to handle, transport, and incorporate into construction projects. Due to their light weight, there is reduced labor costs and faster construction, as well as increased usable space in buildings.

Sustainability: As a recycled product made from fly ash (a by-product of thermal power plant), AAC Blocks are environmentally friendly. In contrast, the production of red bricks depletes the topsoil and can have detrimental environmental effects.

Additional Features

• Fire Resistance: AAC Blocks offer up to 4 hours of fire resistance, compared to 2 hours for red bricks.
• Sound Insulation: AAC Blocks provide superior sound insulation.
• Thermal Insulation: AAC Blocks excel in thermal insulation, reducing HVAC costs by 25-30%, while red bricks offer minimal insulation.
• Earthquake and Pest Resistance: AAC Blocks are designed to withstand seismic activity and resist pests like termites, unlike red bricks.
• Water Penetration: AAC Blocks absorb less water (up to 10% by weight) making them suitable for various weather conditions, whereas red bricks absorb more water.

Most importantly, the rejection rate of bricks is 10-15% higher than AAC. Also, 9 bricks equal 1 AAC Block, therefore rejection rate is further lower for AAC.

The above stated reasons solidify the efficacy of AAC Blocks in the long run. With increasing awareness, government support, urbanization, technological advancements, and cost-effectiveness, AAC Blocks are poised to play a significant role in the country's construction industry.