Era Metal Building Systems Ltd., a company of Era Constructions (India) Ltd, plans to propagate the concept 'to role out a building everyday.' S.V.Rao, CEO, spoke to Madhu Chittora on pre-engineered steel buildings PEBs). Excerpts:

What is the market size of PEBs? What are the advantages of PEBs?
The market potential for PEBs is 1.2 million tonnes per annum. The current pre-engineered steel building manufacturing capacity is 0.35 million tonnes per annum. The industry is growing at the compounded growth rate of 25 to 30 per cent. After five years the potential will be 1.8 to 2 million tonnes and demand will be doubled.
Factors contributing in the growth of the industry are rapid growth in construction, explosion in construction technology and paradigm shift in the use of steel in construction, new industrial estates and upcoming SEZs, tax exemption being given by various states like triple tax exemption in Uttaranchal, rise in demand in real estate and as a result corresponding industry will be growing.
The advantages of pre-engineered steel buildings compared to conventional buildings are very fast completion and construction, aesthetically beautiful, economical, high seismic resistance (up to 8 Richter scale), maintenance-free and can last up to 75 years.
What is the difference between India and foreign countries with respect to pre-fabricated structures? What are the export opportunities?
With respect to design of the structure and aesthetic appearance India is way behind. Indian manufacturers are trying to catch up; comparatively PEBs is a new concept in India. Besides, in fabrication and other areas of PEBs India is good. As compared to other countries Indian codes for building design are stringent but safer. IS standards are upgraded continuously. In India, American codes and standards are also followed.
For export, SAARC and African countries hold good potential.
For the growth of the pre-fabricated structures industry, what are the problems and solutions?
Conventional buildings dominate the Indian sector. Steel price has increased by three-times and as a result PEBs are costly. For pre-engineered steel buildings the biggest detrimental factor is that it is not covered in capital goods and as a result manufacturers can't avail MODVAT. Also, while on selling one can't avail C-Form, so the cost of building increases.
In Thailand, Indonesia and Nepal a roof made from steel is a popular concept, and when an earthquake struck Nepal, steel buildings in a box gained popularity and people carried this box on their back to hills. This concept should be popularised in India.
What innovations and technological developments have taken place in PEBs?
Sometime ago a steel building used to take two to three months, afterwards two weeks and now people are talking about rolling out a building in a day. Earlier, for pre-fabricated structures light gaze metals were used. Over the years modernisation and revolution has taken place. Earlier people resisted and now they are accepting it. Acceptance for pre-engineered steel buildings is not matured but is better in urban areas. Modern equipment like automatic punching and shearing line, hi-tech sub-merged arc welding machine are used for production. It's a factory-finish product with quality. Every part of pre-fabricated structure has undergone revolution.
How much is the manufacturing capacity of the company? Under what brand the company markets its products?
The brand is ERA. The company is 100 per cent subsidiary of Era Constructions (India) Ltd. The existing plant of Era Metal Building Systems at Pantnagar rolled out commercial production two months ago. The company has invested around Rs 100 crore.
Era Metal Building Systems is probably the largest PEB manufacturing company in northern part of India with an installed capacity of 60,000 metric tonnes. By the end of 2008, the company wants to take its capacity to 175,000 tonnes in terms of selling. The capacity utilisation for the plant is 40 per cent and by the end of this financial year the utilisation will be 85 per cent. The current turnover is Rs 75 crore and by the end of the next financial year the turnover will be Rs 250 crore. The company is planning to export 10 per cent of its production.
What are the new things the company is coming up in PEBs?
In foreign countries, even a 40-story high-rise building is constructed by using steel. The company wants to take lead in the construction of high-rise PEBs. The company is in talks with a Chinese company, China Jinggong Group, for a joint venture that would advance its design faculty and help bag projects on high-rise projects. The company is strong in manufacturing and wishes to have an equally efficient partner who could help to design better buildings, especially high-rises and earthquake resistant.
The company wants to propagate a concept to roll out a building everyday. The company wants to roll out around 150 tonnes per day or would like to cover approximately 40,000 sq. ft. per day. Also, the company wants to come up with a building in a box concept. The company is also planning to come up with related products like space frames.
What is the expansion plan?
For the green field plant coming at Hyderabad, the company has finalised 15 acres of land. This plant will be commissioned by July next year. The company will come up with another green field project in the western part of the country, probably either in Gujarat at Baroda or in Rajasthan. The capacity of each green field project will be around 50,000 tones per annum and the company is investing around Rs 75 crore on each green field project.