Indian Construction Chemicals Industry –

Status, Opportunities, Challenges and Strategies

by Upen Patel, Business Director, South Asia
BASF India Limited

0
Construction Chemicals Market Growth

30 CAGR of 15% during 2005 - 2011 27

Market size, INR Billion

25

20

15 12
10
5
5 2
0
1995 2000 2005 2011
Source: primary field data
1
Indian Market split

Others
Tiling 2%
12% comparison with developed world:

Sealants
 High share of Flooring
5%
 Low share of Tiling, Sealants and
Admixture waterproofing
Water 45%
27 Bio
proofings  Non-existent EIFS and wall
INR
14%
systems & bitumen admixtures
 >80% business in new built
Flooring
10% Repairs
& Grouts
12%

Source: primary field data

2
Indian construction chemicals market is INR 27
billion INR representing only 2% global demand

250 235
 Treatment ratio to construction is
200
200 0.5% in India
Market size, INR Billion

 China has 2-3 times the treatment

150 ratio, while USA has 3-4 times the
India treatment ratio
China
 Lower mechanisation, site-
100 USA batched mortar production and
limited awareness is major
50 challenges to achieve higher
27 treatment ratio.

0  Treatment ratio has improved by

2011 25 basis points in last 10 years
Source: WMI, SRI & Freedonia reports, primary field data
3
 INR 140 billion (US$ 3 Bio) market by 2020?

Pessimistic (15% CAGR)

Optimistic (20% CAGR)

160
 2006 – 2011 CAGR was 15%
Market size, INR Billion

140 140.00
120  20% CAGR can be targeted with
100 strong support from government
95.00
with favourable policy changes
80
60  Treatment ratio need to triple
40
27
20
0
2011 2015 2020
Source: WMI, primary field data
4
ADMIXTURES:
India’s penetration levels are 50% lower than China’s
penetration and 70% lower than the developed world
$/m3 of concrete Penetration of concrete
admixtures Factors
5.0 ▪ PCE chemistry well accepted in
3.0 Infrastructures in China as well in Europe
Infrastructure 1.5 ▪ Self-compacting still in infancy in India

India China US/Europe

▪ Rural houses have very low penetration

4.0 ▪ Individual houses in Urban India still opts
for hand-made concrete without chemicals
Real estate
(residential + 1.5 ▪ China & Developed world does not allow
0.5 hand-made concrete to be produced in the
commercial)
urban area
India China US/Europe

4.5 ▪ Hand-made site-batched plaster is

predominant in India having very low
2.0 usage of admixtures.
Overall
1.0 ▪ US/Europe has high focus on long-term
life-expectancy of concrete
structures, hence corrosion prevention is
India China US/Europe
included.
Advantages of using specific constructions
chemicals/new applications
Current usage in Examples from other
Benefits India countries
Polycarboxyles ▪ High Strengths ▪ 5 – 10% ▪ China > 25%
(PCE ▪ Early strength gains penetration ▪ Europe > 50%
Admixtures) ▪ Self-compacting ▪ Japan >80%
▪ Durable concrete

EIFS (External ▪ Energy Efficient ▪ Does not exist ▪ USA: >30% of facades in
Insulation & Facades Commercial buildings
Finishing ▪ High Aesthetics ▪ UAE: Mandatory by
System) ▪ Weatherproof Municipality for Villas
▪ Low maintenance ▪ Europe: Has regulations
▪ China: Designing
Standards & Regulations

▪ Long life of tiles ▪ <5% of tiles fixed ▪ Europe: 90% penetration

Tile Adhesives ▪ Aesthetics & Hygiene using tile ▪ China: World-class
▪ Speed for renovation adhesives standards under-
▪ Low regulations implementation.
Consumption standards can play major role in growth of
construction chemical industry in India

Examples of these
specific standards from
Current Indian standards other countries Benefits to society

Concrete ▪ No restrictions ▪ China, Europe and ▪ Pollution control

Production in USA does not allow ▪ Saving of materials
Urban Area production without ▪ Standardization
Concrete Plants ▪ Scale of economy
▪ Speed of construction

Hand-made ▪ No restrictions ▪ Most of the work is ▪ Speed of construction

plaster in ▪ Local sand is used mechanised with spray ▪ Control on Raw
Urban housing without control of machines & plaster materials
contaminants. produced in plants ▪ Reduced cracking
▪ Long lasting facades

Energy ▪ ECBC 2007 Guidelines ▪ Municipal regulations ▪ India should make

Efficient (not mandated yet) in most of the ECBC mandatory
Buildings Europe, US/Cananda ▪ Reduce Power demand
on consumption of ▪ Lower power cuts
energy
▪ China/UAE started
Thank You