BigBloc Construction an emerging leader in AAC Block

Incorporated in 2015, BigBloc Construction Ltd is one of the largest and only listed company in the AAC Block space with an installed capacity of 8.25 lakh cbm per annum. The company’s manufacturing plants are located in Umargaon (Vapi), in Kapadvanj (Ahmedabad), and in Wada (Palghar). It offers eco-friendly AAC blocks, fueling India's sustainable & energy-efficient construction future, and is among the very few companies in AAC industry to generate carbon credits.

BigBloc Construction has executed over 2,000 projects so far and another 1,500+ are in the pipeline. Its list of clients include Lodha, Adani Realty, IndiaBulls Real Estate, Prestige, Piramal, Oberoi Realty, Shirke Group, Shapoorji Pallonji Group, Raheja, PSP Projects, L&T, and Sunteck, among others.

Autoclaved Lightweight Aerated Concrete Panels

Green Initiatives

BigBloc is installing a 450-kw solar rooftop at its Umargaon and Kapadvanj manufacturing facilities to further minimize its carbon footprint and also reduce about 33% of its power requirement.

Carbon Credits

BigBloc currently generates 60-65k carbon credit units per annum for its Umargaon unit and expects to generate over 2 lakh units of carbon credits per annum post the completion of all the expansions.

AAC Blocks vs Red Bricks

BigBloc AAC blocks that sell under the brand name NXTBLOC, are non-toxic, offer high strength, thermal insulation, have sound-proof and fire-resistant properties, and are lightweight blocks, with the inherent qualities to build strong and long-lasting structures.

These natural, eco-friendly construction material, save energy, and are more economical compared to red bricks. Fly ash constitutes 65% of the raw material, while lime, cement and other raw materials constitute the rest. The density of AAC blocks is 1/3rd of red bricks and do not consume the top layer agricultural soil, unlike bricks.

With the cost of AAC blocks at Rs. 3800 per cubic meter, they are 15-20% cheaper than red bricks at Rs. 4500 per cubic meter. Transportation cost is a major cost factor in both the products and the GST rate for both is 12%.

AAC Blocks a Growing Industry

India is considered as the new land of opportunity for the AAC Blocks industry and the market is anticipated to grow at a CAGR of $14.3 during 2020-27 and reach Rs.11,095 crore.

India is the second largest AAC block manufacturer in the world after China, with 150-180 block producing plants, while China has over 3,000 plants. The Indian industry is (almost) entirely unorganized and characterized by a large number of small scale manufacturers, who compete with one another at the regional level.

Use of AAC blocks is expected to grow enormously in the coming years owing to increased awareness of the product and its benefits over red clay and fly ash, growth in the infrastructure sector, demand for affordable housing, Government’s impetus through numerous infrastructure & housing projects, and regulations to use eco-friendly construction material under its net-zero emission mission.

The Government has mandated green building materials like AAC and Fly Ash blocks for all its infrastructure projects, which is a big positive for the industry. BigBloc is already supplying to Government contractors for Aawas Yojana and other projects.

Expansion Plans

BigBloc Construction
“The expansion of the 2nd phase of our Wada plant and our joint venture plant with SCG are both progressing as planned,” informs Narayan Saboo, Chairman, BigBloc Construction “Post completion, our manufacturing capacity will increase to 13.75 lakhs cubic meter per annum.”

With a vision to become a prominent national player in the AAC Block space and meet the growing demand, the company is exploring manufacturing facilities in Northern as well as Southern India, and also expand its product basket. “We aim to achieve 25-30% sales growth in FY24 with a healthy EBITDA margin of 20-25%,” says Saboo.

Expansion at BigBloc subsidiary: The company’s wholly-owned subsidiary – BigBloc Building Elements - is expected to start work on the 2nd phase of Wada project in Palghar, Maharashtra. The company is planning to add another 2.5 lakhs cubic meter per annum capacity of AAC blocks at the facility. Post completion, the Wada plant capacity will increase to 5 lakh cubic meter. At full capacity, the Wada plant is expected to generate annual revenues of Rs. 200 crore and one lakh units of carbon credits every year.

Joint Venture with SIAM Cement: In a joint venture with Thailand’s SCG Group’s SIAM Cement, the two companies are setting up a 3 lakh cbm per annum plant for ALC Panels and AAC Blocks at Kapadvanj in Ahmedabad, Gujarat. Commercial production is likely to start in the next 6-7 months. This is SCG Group’s first investment in India. BigBloc holds 52% in the joint venture company.

BigBloc Construction
Mohit Saboo, Director & CFO, BigBloc Construction, informs, “Our company is currently generating 60,000 units of carbon credits per annum from our Umargaon unit, while Wada (1st phase) is being registered. We expect to generate over 2 lakh units of carbon credits per annum once all the expansions have been completed.”

New Products

ALC Panels: Autoclaved Lightweight Aerated Concrete Panels are a composite material consisting of cement, lime, and silica sand. These panels use two-way welded steel mesh as reinforcement. They are used for external and internal non-load bearing walls, roofs, floors, etc. in commercial, industrial, and residential buildings. These next-generation panels are versatile, eco-friendly, and have superior technical and functional properties.

“Going forward, we plan to increase our product basket. In the pipeline are Block Jointing Mortar, Tile Adhesives, Gypsum Plaster, and Construction Chemicals,” informs Mohit.

Autoclaved Lightweight Aerated Concrete Panels

Revenue and Profit

The financial position of BigBloc is robust. The company reported an excellent growth over the years with a 3-year net profit CAGR at 132% and sales CAGR at 19%. For FY23, the company reported a net profit of Rs. 30.14 crore registering Y-o-Y growth of 87.4%, EBITDA of Rs. 50.84 crore, 83.5% Y-o-Y growth, Total Income of Rs.200.94 crore, 14.3% Y-o-Y growth of 87.4%, and Promoter Group holding as on June 2023 stands at 72.27%.
ICCT, NOVEMBER - DECEMBER 2023
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