In the midst of several infrastructure project declaration by the government, Masterbuilder had one to one conversation with Mr. Arun Shukla Chief of RMX and Aggregates, Nuvoco Vistas Corp. Ltd. During the conversation he shared insights on the the the concrete market potential and some of the challenges of the present Indian market.
Here are the excerpts of the interview.
What is the potential of the concrete market in India?
The estimated concrete market size in India for 2017-18 is 45 million cubic meters which is expected to reach 50 million cubic meters by 2018 -19. By 2020-21 concrete consumption will increase to 1.3 million m³ which is around 7 per cent growth. The market is anticipated to witness immense growth over the next three years on account of increasing construction spending for infrastructure development. In the Union Budget 2017-18, the Government of India has given a massive push to the infrastructure sector by allocating US$ 61.92 billion ~ (INR 3.96 lakh crores) for the sector. The introduction of Foreign Direct Investment (FDI) projects for the construction of infrastructure projects is expected to spur the demand for the product over the upcoming years. FDI received in Construction Development sector (townships, housing, built up infrastructure and construction development projects) from April 2000 to September 2017 stood at US$ 24.66 billion ~ (INR 1.57 Lakh Crore) ; and in Construction (Infrastructure) activities stood at US$ 10.70 billion.~(INR 0.68 Lakh Crore)
What are the driving factors of the present concrete market in India?
Growing construction spending in light of urbanization, population growth and government infrastructure plans will increase market growth. Basically there will be three main driving factors of concrete in India:
- Industrial / Commercial
Urban population is expected to reach 36% by 2022 from 31% in 2011. Housing sector is expected to grow at 4.0-5.0% over the next five years on back of rising urbanization, increased emphasis on affordable housing, government schemes such as Housing for All (urban housing), Pradhan Mantri Awas Yojana (rural housing), smart cities, etc. With the government giving major thrust to Affordable Housing in both rural and urban where it is planning to build 10 million and 20 million rural units by 2019 and 2022 respectively will spurt the growth of concrete. Though the government focus remains on rural housing, several new measures have been introduced in the Union Budget 2017-18, government has accorded infrastructure status to affordable housing, which is expected to provide healthy momentum for concrete demand.
In Industrial / Commercial segment moderately healthy investments on back of key policies such as Make in India, Capital Goods Policy, Smart City etc will see demand picking up. Lastly, infrastructure segment, which accounts for 15-20% of concrete demand is expected to grow at a fast pace of 9-11% CAGR, as both central and state government increase their focus on infrastructure projects. Within the infrastructure space, segments such as roads and highways, railways and urban infrastructure will rise in overall infrastructure concrete demand pie. In the roads sector, an increase in investments in state roads and national highways (2.1 times against last five years), and rising concrete intensity of road projects is likely to push up demand. Urban infrastructure projects are expected to contribute increasingly with the government’s effort to enhance infrastructure in 100 cities across India under its INR 480-billion Smart Cities Mission. Apart from these new metro rail projects in Lucknow, Nagpur, Pune, Visakhapatnam and Vijayawada, and network expansion in cities such as Delhi, Mumbai, Chennai, Bangalore, Hyderabad, Kolkata, Kochi and Jaipur would contribute to demand for concrete. In railways INR 8.71 lakh crore, has been allocated by railway ministry towards development of freight corridors and several metro projects.
Apart from the above factors some of the other demand drivers are:
- Growth in infrastructure of cities
- Construction of fast track projects
- Increasing popularity of mechanized construction.
- Increasing requirement of consistent quality of concrete
- Entry of MNCs in real estate
- Space constraints at construction sites
- Regulatory spaces making it mandatory for utilization of RMC in construction
Discuss about the various projects and plants of Nuvoco?
Nuvoco Vistas Corp. Ltd. is a leading manufacturer and seller of building materials; with a vision to build a safer, smarter and more sustainable world. Being part of the Indian construction landscape since 1999 with best-in-class products and services in Cement, Ready-mix Concrete [RMX] and Aggregates; we have a pan-India presence in the RMX business; with close to 70 plants across the country. Nuvoco contributes to nation building by providing innovative and world class products and services; from home building to infrastructure projects. Our brands enjoy high recall and are a preferred choice for our customer. Through our research we offer innovative solutions to every requirement or problem; for instance Construction of the Radiation Chamber at the Kiran Hospital in Surat and Radiation Wing in Hiranandani Hospital, Powai. The latter was carried out even as the rest of the hospital continued to operate.
We partner with leading names in the construction and infrastructure industry who are changing the skyline of the country. As one of the leading and most trusted building materials manufacturers in the country, Nuvoco has had the privilege of being the primary supplier for four major Metro projects in India, including the Delhi Metro, Mumbai Metro, Noida Metro, and Jaipur Metro. Till date Nuvoco has supplied approximately 7,68,000 cum of concrete (both value added and normal) to these projects. Another landmark project that we are a part of is Lodha World One – world’s tallest residential towers wherein we have supplied M95 the highest strength of concrete which nobody else has been able to provide in this country. Along with this we have also supplied Agile our self compacting concrete. We have also installed and placed Artiste our decorative concrete solution in Khodaldham Temple, Rajkot which saw over 300,000 footfalls on the inaugural day. Similarly in the Eastern part of India we have been associated with another prestigious project Nazrul Tirtha in Kolkata where again Agile has been used for carrying out intricate stencil work, which wasn’t possible with any other form of concrete. Not only this our concrete has also been used for the restoration of Elephanta Caves – a world heritage structure. Instamix our ready-to-use concrete in bags has been used for this project mainly because the site was located at the middle of the sea and transporting concrete through conventional method was not possible.
Amidst declaration of concreting roads, what is the future of concrete in the Indian market?
India has the second largest network of roads in the world. With the government announcing an outlay of INR 6.92 trillion for building an 83,677 km road network over the next five years it will provide tremendous impetus to concrete demand. The road construction push includes the Bharatmala Pariyojana with INR 5.35 trillion investments to construct 34,800 km of roads. In addition, INR 1.57 trillion will be spent on the construction of 48,877km of roads by the state-run National Highway Authority of India (NHAI) and the ministry of road transport and highways. In 2017-18, concrete demand is expected to revive to 5-5.5% aided by governments push on affordable housing, and increase in outlay for major infrastructure segment viz. roads and railways. Infrastructure segment, which accounts for 15-20% of cement demand is expected to grow at a fast pace of 9-11% CAGR, as both central and state government increase their focus on infrastructure projects. As a result, share of infra demand will increase to 20-25% from current levels of 15-20%. In the roads sector, an increase in investments in state roads and national highways (2.1 times against last five years), and rising cement intensity of road projects is likely to push up concrete demand; use of paver blocks/ concrete tiles, construction of flyovers and other structures has increased cement intensity of road projects. The Ministry of Road Transport & Highways also recently suggested the use of concrete over bitumen for road construction. Most of the new road projects being awarded under Hybrid annuity model are of concrete.
What has been the most challenging project so far and why?
Frankly speaking all our projects are challenging and different in nature. Amidst all the projects that we have undertaken till date all the metro projects are challenging and demanding. However, with our technical expertise and innovative solutions we have been able to address all the challenges that these large scale projects comprise of be it in terms of size; locations; speed in which they have to be completed; quality and quantity of concrete. We have been associated with four major Metro projects in India, including the Delhi Metro, Mumbai Metro, Noida Metro, and Jaipur Metro. For all the above mentioned metro projects Nuvoco has the full scope of work starting from setting up batching plants to operations, maintenance and procuring of raw materials. Metro projects have the highest concrete requirements of all, for which, good quality aggregates are an absolute necessity, but so is ensuring its consistent supply. We successfully developed our own setup for producing aggregates for the project, and following the specifications provided by Delhi Metro Rail Corporation (DMRC), carried out a backward integration with the requirement of Aggregates and Cement so as to meet the quantity and quality requirements efficiently.
For all these metro projects, Nuvoco has done need-gap identification and basis the problem has given solutions which fits the bill. For example in Delhi, Jaipur and Mumbai metro Nuvoco has provided concrete for diaphragm walls. A diaphragm wall is a structural concrete retaining wall constructed before digging in a deep trench excavation, either cast in situ or using precast concrete components. Diaphragms walls are often used on congested sites, close to existing structures, where there is restricted headroom, or where the excavation is of a depth that would otherwise require the removal of much greater volumes of soil to provide stable battered slopes. One of the major challenges Nuvoco faced was that proper compaction was difficult to attain. The space needed to be filled with compacted concrete, and used to be around 600 to 500 mm in width, with a strong reinforcement cage in place. To address this problem free-flowing concrete Agile™ with delay set concrete Lente™ for casting the D-wall for better compaction and possible elimination of bentonite slurry. Instamix Mortare™ for plastering and finishing the wall and high strength concrete Robuste™ to reduce the amount of reinforcement. As a result, it ended up completing the casting of the entire diaphragm wall in record time, not only for this project, but for all of its underground projects.
While working on the underground tunnel section, it had to make sure that the precast liner was suitable enough to take the heavy load, and malleable enough to be set properly. Tunneling is done with Tunnel Boring Machine’s (TBM) in which precast tunnel segments are assembled and erected by robotic ring assembler that snaps the segment into place and then grouted. Which means manufacturing high quality and high strength precast segments ensuring production cycle management and keeping rate of production synchronized with the elements required for uninterrupted feeding to TBM. Nuvoco addressed all these issues with Agile™ and Robuste™ which eliminated extra setting time requirement and provided ease in placement of concrete in the thin structural moulds; ensured faster production cycle; is more compact and dense; de-shuttering can be done in hours; lesser precast yard are is required and reduces size and thickness of the section of elements.