The Key Issues and Challenges in the Construction Chemical Industry in India *

Content Provider	Semantic Scholar
Author	Manjrekar, Pradip Gopal, R. Deshpande, M. R.
Copyright Year	2008
Abstract	Construction chemical is one of the niche segments from the specialty chemical segment of the chemical industry. Construction Chemicals are specialty products that are used in structures to increase their life, and also to impart additional protection from environmental hazards. Certain chemical products also help in minimizing the quantities of cement and water generally required during the construction. In India there are a large number of buildings which are more than 40 to 50 years and which need renovation. The new laws provide for demolishing existing old structures and constructing new high rise buildings. Consequently, therefore the demand for construction chemicals for renovation of these existing buildings has been on the rise in the short term. Additionally, the tropical climate, and the inferior construction material used by builders also cause many of these building to need repairs much earlier. Substandard construction chemicals have been used in a large number of construction projects. The new construction projects market is also expected to increase the demand for construction chemicals. The construction market is expected to grow at more than 30% p.a. for the next few years. There is no published data available indicating the exact growth rate of the construction market. The Indian construction chemical market is highly competitive and fragmented, with large numbers of small and specialized suppliers. In addition to small distributors who import these chemicals, there are a large number of global construction companies who have their local manufacturing operations in India. This market is likely to grow at the rate of around 10 – 15% p.a. in the next few years. Most companies tend to be highly specialized in serving their specific market segment. They generally supply a few product types of different technology/application methods, quality and price to solve specific construction needs such as waterproofing, leakages or fireproofing. In general, the distribution of each particular product involves installation/application and most importantly a warranty on product performance. As a result, it is necessary that distributors of construction chemicals specialize in solutions to specific construction needs. A variety of construction chemicals are used in most large-scale construction projects as well as projects of special design and engineering, depending on their specific needs. These materials include concrete admixture, surface treatment, waterproofing, grout, floor topping, coating, sealer and floor hardening. Therefore, the potential demand for construction chemicals expands to cover the creation of infrastructure, high-rise buildings and industrial plants. In addition, construction chemicals also cover the renovation and repair of such large-scale projects. In fact, renovation and repair make up a substantial volume of construction chemical sales in India. Construction chemicals comprises of a number of different products such as cementations, cement admixture, cold-applied products, hot-applied products, membranes, acrylic, epoxy, resin, and sealant /adhesive. Because the market has a large number of suppliers and products, the majority of suppliers are small distributing companies without a large enough market share to effectively influence the overall market application of construction chemical. This paper analyzes the key issues and challenges this fledging industry faces. The paper is based on both desk and field research and more specifically on two major players in the market. The paper also attempts to evaluate the growth strategies followed by these companies. *Professor & Head-Research & Extension Centre, Dr.D.Y. Patil Institute of Management Studies, CBD Belapur, Navi Mumbai ** Director, Dr.D.Y. Patil Institute of Management Studies, CBD Belapur, Navi Mumbai *** Director, Agile Lifescience Technologies India Pvt Ltd., Mumbai THE INDIAN CONSTRUCTION CHEMICAL INDUSTRY Construction chemical is one of the niche segment from the specialty chemical segment of chemical industry. Construction Chemicals are specialty products that are used in structures to increase their life, and also to impart additional protection from environmental hazards. Certain chemical products also help in minimizing the quantities of cement and water generally required during the construction. The Indian construction industry is very large and is important to various sectors of the economy. The construction industry received a fillip beginning FY03, with the government showing increased focus towards developing a strong and sound infrastructure setup in the country. With the present emphasis on creating physical infrastructure, massive investment has been planned during the Tenth Plan. The construction industry is playing a crucial role in this regard and is gearing itself to meet the challenges. It consumes 40-50% of the National Plan outlay and contributes 20% of GDP. The construction industry has had its fair share in the overall growth of the Indian Economy. With exciting prospects ahead, there is an increased emphasis on high quality construction requiring detailed designing, good workmanship, and the selection of appropriate building materials. Building structures would require protection from natural hazards and industrial corrosives and regular maintenance to sustain for a longer duration of time. Chemicals used in construction impart these qualities to structures. Types of Construction Chemicals: Construction Chemicals can broadly be categorized into five groups: 1. Concrete and Mortar Admixtures. 2. Water Proofing Compounds. 3. Floor Hardeners. 4. Protective Coatings and Resins. 5. Adhesives and Sealants. COMPARISON BETWEEN CONSTRUCTION CHEMICAL AND CONSTRUCTION INDUSTRY GROWTH RATES – *The figures are in Rs. Crore CC=Construction Chemical Source: Chemical Weekly In the above exhibit we can see that the growth rate of the Indian Construction Chemical Industry is consistent. This shows that the application of construction chemical in construction works is increasing gradually. The end users are coming to know about its usage. But to give a healthy boost to the construction chemical industry there are certain weaknesses and threats that need to be addressed which we will see in the further part of the paper. OUTLOOK AND POTENTIAL OF THE INDIAN CONSTRUCTION INDUSTRY
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