Magicrete Building Solutions to invest around Rs 100 crore

Manufacturer of AAC blocks which acts as a replacement for traditional clay bricks plans to set up three facilities across India

Buoyed by demand from realty sector for prefabricated blocks, Magicrete Building Solutions, manufacturers of AAC blocks -- which acts as a replacement for traditional clay bricks, will invest around Rs 100 crore in increasing its capacity and setting up three facilities across India.

The demand for such blocks, Autoclave Aerated Concrete, which are about 9 times the size of a brick, is expected to go further following the ban on illegal sand mining. 'The demand will definitely go up now. Besides, developers are also able to save about 15 per cent on structural cost by using our blocks, ' Sourabh Bansal - Co founder and Managing Director of Magicrete.

The company’s clients include Tata Housing, DLF, IndiaBulls, Lodhas and Sobha Developers among others.

'Since we started in 2007-08, the size of this industry has grown to Rs 500 crore from  just Rs 50 crore and we expect it to grow further to Rs 5000-6000 crore in the next five years,' he said.

To save on labour and other logistics costs, developers are increasingly going for alternatives to bricks for construction.

Fly-ash, a waste from steel manufacturing, is a major ingredient in AAC manufacturing. The company currently has a capacity of 800,000 cubic metres, which will be increased to 1.2 million cubic metre by the end of current fiscal and to 2 million cubic metre in the next 2-3 years, Bansal said. A cubic metre refers to 600 bricks or one AAC block.

The company has two facilities to manufacture AAC blocks, and is planning another 2-3 more such factories across India.

Globally, AAC blocks are widely used in Europe, China, Japan and West Asia. China has witnessed adoption of AAC blocks in the last 10 years with a cumulative capacity of 150 million cubic metre.

Motilal Oswal is one of the PE investors in the company, investing over Rs 35 crore. The company also plans to export AAC blocks and AAC panels to developing countries such as Sri Lanka, Burma and others.'We are in discussions with developers in these countries but nothing has been finalized yet,' he said.