The Construction Chemicals industry is poised towards tremendous growth. From discussing about the issues and challenges to meeting the demands of the industry, Chembond and Choksey put forwards their outlook

What are the key issues and challenges being faced by the construction chemicals industry in India?
Deepak Kanitkar, Chembond Chemicals Limited: Consistent shortages of key high performance raw materials along with increasing costs are a big worry in the short term. Lack of standards in application of products and the unchecked entry of inferior quality product manufacturers is tarnishing the image of the industry. While awareness on the use of construction chemicals is now high, lack of specific education infrastructure for users and applicators is another challenge.

Sameer Gurav, Choksey Chemicals Pvt. Ltd: To encourage a customer to change their traditional methods and use new technology is a tough task. Being a price sensitive market like India, R&D is important to maintain a balance between quality and price to compete with unorganised sector and localised companies. In addition our industry has less no. of skilled labour which is an important requirement for the construction industry.

How is the construction chemical industry planning to meet the current demand-supply gap?
Deepak: As there is no common entity or association that manages production and supplies it is essentially ‘each one to his own’, as far as meeting the demand goes. The slow growth of infrastructure development has unfortunately meant that the ‘happy problem’ of scaling up capacity to meet demand has been non-existent so far. Logistics is a challenge and it is impossible to operate without multiple plants across the country for a national level player.

Sameer: The market for construction chemicals is growing at the rate of 20 per cent. In the current scenario, a considerable fraction of new demand is being generated by budding countries like India. Market disintegration continues as new demand is generated from a supply and demand gap. As a leading manufacturing centre for a no. of MNC’s, Indian construction chemical industry  is growing fast and the demand growth is also supported by the appearance of new market applications. To bridge this gap, on the supply side, new small and medium sized companies have started to serve targeted market segments or focus in a specific technology.

With the increasing number of construction being carried out in the country, are there any possibilities of compromising on the quality of construction chemicals used in the process?
Deepak: This again would vary from manufacturer to manufacturer and depends on the values a company is built on. Capacity expansion is not an issue and so meeting quality requirements consistently is not a challenge. Some of the raw materials used in the manufacture of construction chemicals are derived from natural sources and could vary in consistency but these are not impossible problems to overcome. At the end of the day, a customer would assign a greater value to the combined offering of superior product performance with meaningful technical support.

Sameer: The introduction of sub‑standard products manufactured by the small players for maximising profit has ruined the industry growth.  Consumers using sub-standard products don’t get the results by the applications, which in turn develop adverse insight for the customers as well as end users.

How do you see the construction chemicals industry growing in the next few years?
Deepak: As India moves higher on the industrialisation and prosperity curve, the growth in the construction industry would be assured. More manufacturing activity would lead to more jobs, which would lead to higher demand for housing which would result in the growth of towns and cities, which ultimately will mandate infrastructure development. So, all around construction growth is assured. How fast these are acted upon by the government departments is unknown. Further, private investment led construction activity is poised for a healthy growth of about 7 – 8 per cent year-on-year for the next few years.

Sameer: At present, organised players control about 70 per cent of the market share. Due to result of boom in the construction industry and encouraging government policies the market for construction chemicals is likely to grow at the rate of around 20 per cent annually with the driving demand of construction chemicals in the next few years.

Describe the growth strategies being planned by your company to enhance the quality of products.
Deepak: At Chembond, we are working on various development projects. We expect to introduce new and innovative solutions to the construction industry in the coming years. Our goal will be to strengthen our technical function and share the wealth of our experience and knowledge with the customers. We believe in partnering our customers in growth and carrying our personnel along on the journey. Our products targeted at the retail channel are sold under the ‘K-FIX’ brand. These products are enhanced products and are made in line with the best practices followed by some of the leading multi-national companies operating in India. Our products for larger construction are organised in the infrastructure vertical. These are now increasingly being made by incorporating industry best raw materials from leading global suppliers. Our quality assurance and R&D lab is housed in a spacious 2000 sq. ft well-equipped facility attached to our plant in Gujarat, making the focus on product development and quality enhancement more distinct. We have invested significant resources to this end.

Sameer: Choksey Chemicals has always been in good deed of unbeatable quality products which not only fulfils requirement of the structure by its performance but also enhances the life and strength of it. Hence our superlative research and development team continuously works on making innovative products and improving performance of existing product range. Our Quality Control team are on their toes to ensure all products match their international quality standards. We have technical tie-ups with our global partners like Rohm & Hass, Singapore / D.S. Brown Co. (USA), Bitumat & Co. (Saudi Arabia), Drizoro (Spain), Dow Corning (USA) Remmers (Germany) for environment friendly technologies. This reflects in our product range to ensure we not only make healthy constructions but create healthy environment. Choksey Chemicals has rust remover for corrosion protection and an indigenous polysulphide sealant i.e. techseal; which is a no.1 brand in its segment. In addition to this, we are first to introduce electrometric waterproof coatings i.e.Futura-5 & Wall Nut in India. Moreover we have some inventive product like Sunshield 100, Splash & Flexopatch which are unique in their category.

What is the contribution of Indian construction chemical industry in the country’s exports?
Deepak: I am not aware of the numbers but do not think that this would be a substantial number as the products are best profitable and also competitive when manufactured closer to the markets.

Sameer: Indian Construction Chemical Industry contributes by far to the country’s exports. Around 20 per cent of the industry turnover is achieved through exports. The major exports are to US, Europe, Germany, SAARC nations etc. helping to earn a good chunk of foreign exchange to the country. The cost of manufacturing is low in India as well. In addition, the organised players do not compromise in the quality which is an important criterion and hence there is a good opportunity to target other western countries where the construction industry is growing rapidly.

With the government’s decision to introduce 100% FDI in the construction industry, how is it going to benefit the construction chemicals industry?
Deepak: The market for higher performance products would grow. As not all products have been used in India, we expect to see a growth in demand for ‘special’ products that have not been common in the Indian market place. Some construction technologies like insulation in buildings make commercial sense in temperate countries like India but have not been widely used till date due to lack of experience or demand. With international investments in construction, the construction practices would also undergo a change and see an increase in demand for new products.

Sameer: The 100 per cent FDI for infrastructure industry in retail has boosted the construction chemical industry growth in terms of volume as the no. of projects is increasing day by day. This has made more and more foreign investors to see India as a high growth market which in turn is helping construction chemical companies to get good mileage in fast growing infra projects. The increased flow of FDI in construction chemicals industry in India has helped in the development, expansion, and growth of the industry. This in turn, has contributed to the enhancement of the quality products and expansion of the industry.