— Ewart Lazarus,
Executive Director, Chowgule Construction and
Technologies Ltd
What is the current market
size and expected growth of
construction chemicals in India?
Construction chemicals in India
as of last year would be
3,200
crore. The construction chemicals
sector has seen a very good
growth trend which has increased
to 18-22 per cent CAGR. This is
expected to continue but the
recent slowdown has had an
impact which is to be felt. Larger
players will still show considerable
growth. It will be interesting
to see what happens after September
or October of the current year,
but growth will continue, be it 18-
22 per cent or more. Manufacturers
and contractors who provide
good quality services and application
will be affected much less
than the others. Waterproofing is
expected to grow up to 22-24 per
cent of the entire market.
What are the latest trends in
India's construction chemicals
sector?
The construction chemicals sector
is moving towards ensuring actual
construction happens much
faster today. Projects are completed
earlier than in the older days,
maybe 10 years ago. Today, much
of the emphasis is on the quality
and speed of construction. But
what also holds this back is the
time taken for completion due to
other reasons like permissions,
stoppages, labour, and other indirect
matters. However, the market
being big and with many multinational
companies coming in, the
trend is moving towards growth.
Most of the construction chemical
market is in the B2B segment,
some in B2C segment, which in
future is expected to increase its
share in the overall market. So you
have many new-age materials,
products with more features that
ensure longer durability of structures,
environment protection,
and anti-corrosion (protection
against water). The bottom line for
preserving the structure is to protect
against water which causes
rusting of steel and carbonation of
your concrete.
What are some of the key
demand drivers?
The biggest demand driver is government
sector projects. The
largest projects in the country
today are being implemented and
run by the government. Still, there
is low usage of construction
chemicals in this sector in India,
including in the private sector,
compared to that abroad-in Germany
it is €6 billion, in US it is $5-
6 billion, in India right now it is
only €500 million, even China
much ahead of India.
The key driver in the international
construction chemical market
is standardisation, which is not
relevant in India. Once it is standardised
here also, the usage of
construction chemicals will
increased and the quality and
durability of the structures will
also improve. Today, many contractors
do not use construction
chemicals much to cut cost; only 2
per cent is utilised. Construction
chemicals is important in all construction
projects in all sectors
including buildings, roads,
bridges, tunnels, metros, power,
irrigation, airports, ports, shipping
etc.
What about the grey market?
There is a grey market in
every industry. The efficacy of
construction chemicals does not
only depend on the quality but
also how it is used. There are small
players who also deliver good
products. It is difficult to comment
on it.
Standardisation in any construction
will help the industry to
grow. Specifications are laid by
applicants, but it is not standard.
We have to meet the requirement
for construction and there is no
authority to check. There is no
clear policy either.
Can you discuss foreign
technology in this market?
In India, we are very good at
adapting ourselves to new foreign
technology. Chowgule works with
Germans for flooring, anti-corrosive,
waterproofing, structural
repairing etc. They bring innovative
new products and systems for
the Indian market. In fact, many of
our systems are almost standalone.
We prefer to use technology
from abroad.
Finally, what would your
SWOT analysis be?
Strengths: The construction
chemicals industry in India is at a
nascent stage with a huge potential
to grow:
- Organised players are bringing
in huge investments to set up
training facilities for marketing
personnel, applicators etc.
which translates into quality
products and projects.
- Large businesses in the industry
are collaborating with foreign
players to bring in
advanced technologies,
enhancing quality and reputation
of the industry.
- The construction chemicals
industry is a natural partner to
the burgeoning real estate sector.
- Usage of quality chemicals
improves the life of structures,
decreasing abrasions and
boosting strength and stability
of projects
Weaknesses: The construction
chemicals industry in India is
marred by multiple issues that
need to be addressed on a priority
basis for its growth:
- There is a complete lack of
awareness about the need to
have standard water proofing,
floor coating and other such
solutions.
- As a result, consumers
tend to focus on the
transaction costs rather than life
cycle costs
- Construction chemicals are a
manpower intensive industry
with an ongoing requirement
for marketing professionals
with technical know-how and
skilled applicators.
- Lack of robust back end infrastructure
to provide customer
service/support is a constant
problem for both, the manufacturers
of construction chemicals
and end users.
Opportunities: A number of
opportunities wait to be explored
by the construction chemicals
industry to achieve its full potential
and optimum growth levels:
- Very large and critical sectors of
the economy including infrastructure
and real estate are
dependent on the construction
chemicals business for longevity,
hence complete success.
- With the governments focus on
development of quality infrastructure
across the country,
construction chemicals will
gain enormous importance in
times ahead.
- Large number of upcoming
housing and commercial projects,
which gives the industry
massive potential for growth
Low cost of manufacturing construction
chemicals in India
means that there is an opportunity
for exports
Threats: The biggest threat to
this industry comes in the form of
a lack of government regulations/
strict laws to govern the use
of standardised products and procedures
which not only hampers
the quality and lifecycle of the
project but also the reputation of
the industry.
What are your future plans?
We are planning to grow to
100 crore in the next three years.
We are currently expanding our
production facility in Goa from
8,000-9,000 tpa to 22,000-24,000
tpa by 2013. We are also proposing
to set up a production facility in
Gujarat. We are looking at the
power sector, paper industry,
repair and rehabilitation of ports
and jetties, tunnelling, and oil and
gas for anticorrosion.
Our challenging projects
are Bombay Stock Exchange,
Grand Hyatt, repairs to a jetty in
Gujarat, subway, and waterproofing
under a railway track. Our
current business order is around
20 crore.