Smart cities to drive construction chemicals market to reach Rs 7000 cr

Infrastructure and construction boom – driven by smart cities – is expected to trigger a manifold increase in demand for construction chemicals with the industry reaching Rs 7000 crore by 2018-19 from Rs 3,500 crore in 2013-14. According to a knowledge paper on construction chemicals by Tata Strategic Management Group and industry body FICCI, the industry is expected to grow by 15 percent per annum over the next five years.
 
This paper was presented at the sixth national conference on construction chemicals 2015 - with the theme ‘Construction chemicals industry as enabler for smart cities’ – held on May 8, 2015 in New Delhi.
 
“The domestic industry was unable to keep pace with the demand, hence two-thirds of the construction chemicals was being imported. The industry has to turn this challenge into an opportunity and the gap should be bridged by local construction chemicals manufacturers,” said Surjit Kumar Chaudhary, secretary, Department of Chemicals & Petrochemicals, during the conference.
 
With the rapid urbanisation taking place in the country, the construction chemicals industry was expected to grow at a CAGR of 20%, said Dr S Hariharan, CEO, Solaris Chemtech Ltd. Hence, he added that it was necessary for industry to work in tandem to reap the benefits of this growth.
 
Dr Surendra Manjrekar, chairman & managing director, Sunanda Specialty Coatings Pvt Ltd, suggested that a task force of experts should be constituted to chart the road map for creating 100 smart cities in the country. “Smart construction chemicals could well assist in enabling smart cities as the sector offered sustainable and durable products,” he added.
 
According to Dr Gopal Rai, CEO, R&M International Pvt Ltd, the key to success for this sector was R&D, practical on site demonstration, access to global experts, destruction demonstration live test and publication of success stories in form of case studies. He added that curriculum should treat construction chemicals as a specialised engineering and use of construction chemicals should be encouraged as it could be implemented speedily.
 
Mukesh Malhotra, co-chairman, FICCI chemical committee and country manager, Solvay, stated that construction chemicals industry could be termed as ‘sunrise industry’ and was growing at a rapid pace but the use of construction chemicals was still low in India because of the low market awareness.
 
Raising the issues of impact of FTAs and inverted duty structure on the sector, Mukesh Malhotra, said industry felt that FTAs were having a negative impact on business, and created an 'inverted duty structure' making it cheaper to import a finished product rather than manufacturing or assembling it in India. Hence the government needs to focus on these issues to encourage domestic production for enabling creation of smart cities.
 
Surjit Kumar Chaudhary assured that the government was addressing the issue of FTAs and inverted duty structure.
 
According to the knowledge paper, admixtures constitute majority of the construction chemicals market with 42 per cent share. “Chemicals for repair and rehabilitation constitute another 12 per cent of the market, while remaining 18 per cent belongs to adhesives and sealants,” the paper added.