Post on 08-Mar-2018
1MCG
BUILDING MATERIALS IN INDIA
- An demo pack of select slides -
Madras Consultancy Group, Chennai, India 2008
2MCG
Important Note !
This demo pack, extracted from presentation entitled ‘Building materials in
India’ was prepared by Madras Consultancy Group in 2008. The information presented herein is intended to provide the reader a flavour of the building materials sector and has been collated from various published sources & MCG’s own library. Prior to undertaking any business or investment decisions, further detailed investigations / studies are recommended. This note remains MCG’s intellectual property & no part may be reproduced or circulated on electronic media, in print form or by email without the prior permission of Madras Consultancy Group, 1A, Ananya, No.41/17, I Avenue, Indira Nagar, Adyar, Chennai 600 020, India.
Copyright© MadrasConsultancyGroup2009. All rights reserved
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Contents
Building Materials :• An overview
• Cement
• Tiles
• Sanitary ware
• Bathroom fittings & Accessories
• Paints
• Roofing Systems
• Glass
• Lighting
• Wood
• Steel
4MCG
Building Materials : Overview
• Building materials constitute anywhere between 50 to 75 % of the total cost of construction, in India
• The combined market value of cement, bitumen, iron and steel, chemicals, bricks, paints, tiles etc is estimated at INR 2,500 billion annually
• Building material usage which is largely accounted by the domestic housing sector, has its own unique characteristics, e.g. :
– Use of burnt bricks, with cement plastering as the primary material for walls
– Extensive use of traditional, locally available materials like timber, bamboo, palm leaves, mud, stones, etc., in rural areas
5MCG
Real Estate - Overview• The Indian real estate market is
expected to reach $50 billion by 2009-10
• Real estate potential in India:
– The market is expected to grow at a CAGR of 33% across 2005-10
– Housing: About 20 million new units expected over the next 5 years
– Office space: Five-fold increase in office space over the next five years
– Retail space: Mall space to increase by 70 million sq. feet over the next few years
– Hotels: Over 1,50,000 new hotel rooms in the next five years
13
50
0
10
20
30
40
50
60
2004-05 2009-10
Others12%
Retail14%
Housing74%
Real estate market ( $ billion)
Real estate market : US$ 50 billion (2009-10)
6MCG
Residential Units – Growth Trends
• Growth in population, urbanisation and income have driven the demand for non-slum houses across India
• Housing stock was estimated at 255 million units in 2007, and is expected to reach 286 million units by 2011, at a CAGR of 3.0% per annum; to add an average of 7.7 million residential units annually
• A planning commission survey report indicates a shortage of about 24.7 million houses in India in 2007
2007 2011
Estimated Housing Stock 255.0 286.0
Estimated Housing Shortage 24.7 30.0
Housing Demand Estimation Million Units
7MCG
Increase in Commercial Space
• By 2010, the IT-ITES sector will add more than a million people. Consequently, creating office space demand of 100 million plus square feet
• The demand for office space is expected to go up to 500 million sq feet in the next ten years
• The non-IT and manufacturing sectors are also migrating from legacy buildings to Grade-A office spaces. This is expected to account for 30-40% of India’s commercial real estate demand over the next decade
95
90 90
878889909192939495
India Seoul Hong Kong
Area of office space( mn sq ft)
8MCG
Increase in Retail Space• India ranks first in the 2005 Global Retail Development Index across 30
emerging global markets
• India’s organized retail sector is expected to grow around 25% to 30% over the next five years
• The available mall size of about 40 million sq feet is expected to increase to 100 million sq. feet by 2010
• The number of malls in Mumbai, Bangalore, New Delhi and Pune is expected to reach 250 by 2010
Shopping Malls - Units
150
1,000
0200
400600
8001000
1200
India UK
9MCG
Increase in Hotels
Hospitality industry - Number of Rooms
6500
36000
70000
0
20000
40000
60000
80000
India Seoul Hong Kong
• Occupancy rates in Indian hotels is around 80%. The hotel industry is facing an acute shortage of rooms
• To match the burgeoning demand for accommodation in business centers and tourist attractions, a huge growth is expected in the hotel industry
• An estimated $ 11.5 billion investment is expected in this sector over the next two years
• 40 international brands are likely to establish their presence in India by 2011
10MCG
Cement : Contents• Introduction• Capacity & Production• Raw Material & Fuel• Cement Production : by type• Consumption patterns• Production &n Capacity Utilisation• Process capacity : Large plants• Capacity Utilisation : Select Players• Sales & Distribution• Major players & Market share• Export & Import• Cement Major users• Cement Energy consumption• Ready Mix Concrete (RMC)• Competitive Scenario• Recent developments• Government policies• Company Profile
11MCG
Cement Industry : Overview
• The Indian cement industry dates back to 1914, and the first unit was put up in Porbunder, Gujarat
• India is the second largest producer of cement in the world, and has an installed capacity of around 196 million tonnes per annum (2007-08)
• The per capita consumption of cement in India is at 135 kgs and is the lowest, compared to the world average at 250 kgs, thus offering scope for future growth
• An additional capacity of around 115 million tonnes is expected to be added by the end of 2012
• The cement industry accounts for approximately 1.3% of the country’s GDP
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Million Tonnes
• Installed capacity 178.0– Large Plants 167.0– Mini Plants 11.0
• Production 162.0– Large Plants 156.0– Mini Plants 6.0
Installed Capacity & Production (2006-07)
29.6
23
22.9
24
28.9
18
50.8
45
25.0
18
Installed Capacity :
No. of Plants :
North East West South Central
Mn.T
Nos.
13MCG
Major User Segments
Housing65%
Repair Work20%
Infrastructure and Industry
15%
• Housing sector accounts for bulk of the consumption
14MCG
• Threat of imports not very much - due to weight & bulk - transportation problems
Export Import
2001 - 02 4,512 922002 - 03 5,755 422003 - 04 8,460 932004 - 05 10,285 822005 - 06 11,153 1392006 - 07 11,474 654
Export & Import Trends : (2001 – 2006)
INR Million
15MCG
Tiles : Contents
• Introduction• Industry Structure• Technology & Raw Materials• Production• Major Players & Market Shares• Expansion plans• Marketing & Distribution• Import & Export• Outlook• Company Profiles
16MCG
Ceramic Tiles : Overview
• Ceramic Tiles forms an integral part of the home decoration
• India ranks 5th in term of ceramic tiles production in the World
• The ceramic tile industry is divided into organised and unorganised sector. The unorganised sector accounts for 55% of the total Industry
• The industry turnover was estimated at INR 65.0 billion in 2006-07 & INR 86.0 billion in 2007-08
• Domestic production of ceramic tiles was estimated at 340 million sq. meters in 2006-07, compared to the Global production at 6.9 billion sq. meters
• Per capita ceramic tile consumption in India is 0.30 sq. m per annum as compared to 2 sq. m. per annum in China and 5 to 6 sq. m. per annum in European countries and 2.5sq.m per annum in brazil(2006-07)
• The industry is witnessing a growth rate of 15% per annum compared to the Global growth rate at 6%
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Tiles : Industry Structure
• There are around 16 players in the organised sector, and around 200 in the unorganised sector (70% based in Gujarat region)
• Industry divided broadly into Wall tiles & Floor tiles Vitrified tile and Porcelain tile segments:
Floor tiles53%
Wall tiles35%
Vitrified / Porcelian
12%
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0.010.020.030.040.050.060.070.080.0
Organised 13.8 12.0 2.4 1.8 30.0Unorganised 12.2 20.0 2.1 0.7 35.0Total 26.0 32.0 4.5 2.5 65.0
Floor Tiles Wall Tiles Vitrified Tiles Procelian Total
Tiles Industry : Production (2006-07)
Turnover (INR Billion)
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Sanitaryware : Contents
• Introduction
• Industry Structure
• Major Players & Market Shares
• Production
• Import & Export
• Competitive Scenario
• Outlook
• Company Profiles
20MCG
Overview
• Sanitaryware market in India is estimated at INR 25 billion (2006-07)
• India accounts for 8% of the world’s sanitaryware production
• India’s production for the year 2006-07 was 22 million pieces, while the global production stood at 300 million pieces
• The Global sanitaryware industry is expected to grow at 5 – 7% per annum, compared to India’s at 12 to 15% per annum
• Indian sanitaryware industry can be broadly classified into the organised segment and the unorganised segment; the organised sector accounts for the largest share of the market at 60%
• The branded segment is growing at 15% per annum, while the non-branded segment is witnessing a lower growth rate of 8-9% per annum
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Key Statistics (2006-07)
All India production (million pieces) 22 million pieces
Organized sector: Share of Production: 60%
No. of units: 9
Production Capacity: 118,000 tonnes p.a
Actual Production: 108,000 tonnes p.a
Unorganized sector: Share of Production: 40%
No. of units: 250
Production Capacity: 220,000 tonnes p.a
Actual Production: 72,000 tonnes p.a
22MCG
Industry Structure : Major Products
EWC25%
IWC2%
Orissa Pan45%
Wash Basin – Small
7%
Wash Basin – Mediu
m17%
Urinals4%
• The Orissa pan accounts for 45% of the sales
• IWC’s have been almost fully replaced by Orissapans
• Orissa Pan and IWC - primarily for rural / semi urban markets
• EWC’s to a large extent is limited to Urban markets - but have steadily increased their market driven by gradual change in consumer preference
• Urinals limited to the institutional markets
IWC - Indian Water Closet EWC - European Water Closet
23MCG
Bathroom Fittings & Accessories : Contents
• Introduction
• Major Products: Bath Fittings
• Major Products: Bathroom Accessories
• Raw Materials & Surface Coatings
• Major Players
• Competitive Scenario
• Outlook
• Company Profile
24MCG
Overview
• Bathroom fitting market is estimated to be worth INR 15 billion (2006-07)
• Organised bath fittings market is estimated at around INR 5 billion and is growing at 13.5 %
• Almost all the manufacturers of bathroom fittings are located in North India. Manufacturing clusters are located in:
• Delhi• Chandigarh• Mathura, UP
• Industry dominated by unorganised sector– Number of players in the unorganised segment exceeds 200
25MCG
Major Products : Bath Fittings
• Pillar cock (wash basin taps)
• Bib cock (bathroom taps)
• Stop cock (used for shower)
• Basin mixers (are fitted in wash basin to mix hot and cold water)
• Wall mixers (are fitted in bathroom walls used to mix hot and cold water)• Diverter (directs the flow of water to the bib cock, shower, etc.)
• Spout (outlet for water without a control knob)
• Flush valves (used to control flow of water to the flush)
• Angle valves (fitted below the wash basin to control flow of water)
• Bidet fittings
Cocks and mixers constitute 75 -80 % of the total bathroom fittingsmarket
26MCG
Paints : Contents
• Introduction• Industry Structure• Technology & Raw Materials• Major Categories• Production• Major Players & Market Shares• Technical Collaboration• Decorative Paints : Overview• Industrial Paints : Overview• Recent Developments• Outlook• Duty Structure• Company Profiles
27MCG
Overview
• Domestic market is estimated at around INR 95 billion (2006 - 07)
• Indian share in global paint market is 0.6%
• Per capita consumption - 0.5 kg - much lower compared to other countries :
– Global - 15.0 kgs– China - 1.6 kgs– Thailand - 4.0 kgs– South Korea - 10.0 kgs– USA - 27.0 kgs
• Present growth rate : 15%
• The organised sector accounts for 70% of the market while the unorganised(small scale units) account for rest of the market
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Major Categories
Others4%
Automotive6%
Cement paints14%Distemper
18%
General Industries
7%
Emulsions4%
Enamels / Varnishes
47%
Industrial
29MCG
Technology & Raw Materials
• Raw material costs account for 60 % of the total cost
• In small scale units it forms upto 70% of the net sales
• Industry use around 300-400 types of raw materials; 3 major groups
– Pigments, Solvents, Resins & Additives
• Major Raw Materials
– Titanium dioxide, Pthalic Anhydride (PAN) , Pentaerythritol (PE), Paraxylene, Orthoxylene, Turpentine, White Sprit, Glycerine, PentaButanol
– Titanium oxide is the important raw material for paint; of the production 60% is consumed for the paint production
– The paint industry presently imports Titanium dioxide in excess of INR 1 billion
30MCG
Production Trends (2000 – 2006)
720
667637
645
719
727
774
500
550
600
650
700
750
800
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
000 tonnes
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Glass : Contents
• Introduction
• Major Players
• Major Players & Market shares
• Flat Glass Production
• Import & Export
• Glass in building Industry
• Outlook
32MCG
Overview
• The country currently has a total flat glass manufacturing capacity of 950,000 tonnes per annum. Float glass has larger share of the capacity at 80% compared to sheet glass at 20%
• The production of flat glass during 2006-07 was estimated at 667,000 tonnes per annum
• Market Size : INR 32 billion ( 2006-07)
• India’s per capita consumption of float / sheet glass is the lowest in the world, only 0.8 kg compared to other countries such as Thailand (5.2 kg), China (3.5 kg), Malaysia (2 kg) and Indonesia (2.5 kg)
• The glass business in India comprises three segments: – Float glass – basic raw glass– Automotive glass – value added float glass for automotive applications – Architectural glass – value added float glass used for various
applications (eg. buildings and offices, mirrors, reflective glass etc.)
33MCG
Flat Glass Production : (2001-2006)
660740 723 736
883
1104
0
200
400
600
800
1000
1200
1400
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
Million sq. meters
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Export & Import (2001 – 2006)
3.8
4.4
1.1
2.42.6
1.9
1.7
2.4
1.2
1.41.5
2.0
1.51.4
0.0
1.0
2.0
3.0
4.0
5.0
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
Import Export
INR Bn.
35MCG
Lighting : Contents
• Lighting Industry in India
• Major Players & Market Shares
• Major Players & Turnover
• Luminaries
• Outlook
36MCG
Overview
• The INR 50 billion Lighting industry in India is divided into
– Light sources (Lamps) 70% share– Lighting fixtures (Luminaires) 30% share
• The lighting industry in India is growing at 20% per annum over the last two to three years
• The market for luminaires was estimated at INR10.0 billion in 2006-07, and includes products such as Lourves, Reflectors, Chokes and Ballasts etc.
• Major players in this sector are Bajaj, GE India, Crompton Greaves and Philips
37MCG
Production (2006)
Category Organized Sector SS Sector Total
2006
GLS Lamps 550 280 830
FTL 128 48 176
CFL 52 48* 100
Special Lamps 10 4 14
Quantity : Million pieces
*SS Sector for CFL also includes import as well assembled CFL
Source : ELCOMA
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Steel : Contents
• Introduction
• Industry Structure
• Capacity & Production
• Category wise production
• Steel Products : Total production
• Major Players & Production
• Steel Duty Structure
• Outlook
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Overview
• The birth of the Indian steel industry and commencement of large scale steel production can be dated back to 1907, when Tata Iron and Steel Company (TISCO) set up their steel plant at Jamshedpur
• Liberalisation in 1991 ushered in de-licensing, price decontrol, lowering of import restrictions, lowering of duties, and abolition of freight equalisation;
• Steel industry was delicensed and decontrolled in 1991 & 1992 respectively
• India is the 7th largest producer of steel in the world and the 4th largest producer of iron ore
• India is also the largest producer of sponge iron in the world
• Per capita consumption of steel in India is at around 35 kg, and is much lower than the world’s average of 150 kg and China’s average at 300 kg
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Industry Structure
Steel industry is broadly classified into
• Long products : Angles, Channels, Rods, Bars etc.
– Used primarily by the construction sector (major product is cold twisted bars), general engineering / fabrication, transmission towers etc.
• Flat products : Hot Rolled (HR) Coils, Cold Rolled (CR) Coils, Plates etc.
– User segments - Automobiles, General engineering / fabrication, Consumer durables, Packaging
• Tube & Pipe are made from HR / CR sheets / coils
• Semi finished : Billets,Blooms,Rods etc.
41MCG
Capacity & Production : (2006-07)
Capacity– Primary Sector : 51 MTPA (2006-07)
Production, Exports & Imports2006-07
( Mn tonnes )Pig Iron : 7.0
Sponge Iron : 16.3
Finished Steel : 45.0
2006-07
Steel ( Mn tonnes )
Exports : 6.8
Imports : 6.8
42MCG
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I Avenue, Indira Nagar, Adyar, Chennai 600 020, India.
Tel : +91 44 4211 3434 / 4211 3492 Fax : +91 44 4211 3490 email : admin@mcg.in, office@mcg.inURL : www.consultmcg.com
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