BUILDING MATERIALS IN INDIA

- An demo pack of select slides -

Madras Consultancy Group, Chennai, India

2008
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 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

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 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

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 Real Estate - Overview
• The Indian real estate market is Real estate market ( $ billion)
expected to reach $50 billion by 2009- 60
10 50
50

• Real estate potential in India: 40

30
– The market is expected to grow at 20 13
a CAGR of 33% across 2005-10
10
– Housing: About 20 million new 0
units expected over the next 5 2004-05 2009-10

years
Real estate market : US$ 50 billion
– Office space: Five-fold increase in (2009-10)
office space over the next five
Retail
years 14%

– Retail space: Mall space to

Others
increase by 70 million sq. feet
12%
over the next few years
– Hotels: Over 1,50,000 new hotel Housing
rooms in the next five years 74%
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 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

Housing Demand Estimation Million Units

2007 2011

Estimated Housing Stock 255.0 286.0

Estimated Housing Shortage 24.7 30.0

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 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

Area of office space( mn sq ft)

95
95
94
93
92
90 90
91
90
89
88
87
India Seoul Hong Kong 7
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 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

1200
1,000
1000
800
600
400
150
200
0
India UK
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 Increase in Hotels
• 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

Hospitality industry - Number of Rooms

80000 70000

60000
36000
40000

20000 6500
0
India Seoul Hong Kong
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 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
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 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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 Installed Capacity & Production (2006-07)

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 : 29.6 22.9 28.9 50.8 25.0 Mn.T

No. of Plants : 23 24 18 45 18 Nos.

North East West South Central

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 Major User Segments

Infrastructure
and Industry
15%

Repair Work
Housing 20%
65%

• Housing sector accounts for bulk of the consumption

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 Export & Import Trends : (2001 – 2006)

• Threat of imports not very much - due to weight & bulk - transportation
problems
INR Million

Export Import

2001 - 02 4,512 92
2002 - 03 5,755 42
2003 - 04 8,460 93
2004 - 05 10,285 82
2005 - 06 11,153 139
2006 - 07 11,474 654

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 Tiles : Contents

• Introduction
• Industry Structure
• Technology & Raw Materials
• Production
• Major Players & Market Shares
• Expansion plans
• Marketing & Distribution
• Import & Export
• Outlook
• Company Profiles

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 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:

Vitrified /
Porcelian
12%
Wall tiles
35%

Floor tiles
53%

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 Tiles Industry : Production (2006-07)

Turnover (INR Billion)

80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
Vitrified
Floor Tiles Wall Tiles Procelian Total
Tiles
Organised 13.8 12.0 2.4 1.8 30.0
Unorganised 12.2 20.0 2.1 0.7 35.0
Total 26.0 32.0 4.5 2.5 65.0

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 Sanitaryware : Contents

• Introduction
• Industry Structure
• Major Players & Market Shares
• Production
• Import & Export
• Competitive Scenario
• Outlook
• Company Profiles

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 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

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 Industry Structure : Major Products

• The Orissa pan accounts for 45% of

Urinals the sales
Orissa
4% Pan
Wash • IWC’s have been almost fully
Basin – 45%
replaced by Orissapans
Small
7% • Orissa Pan and IWC - primarily for
rural / semi urban markets
Wash
Basin – • EWC’s to a large extent is limited to
Mediu IWC
Urban markets - but have steadily
m increased their market driven by
EWC 2%
17% gradual change in consumer
25%
preference

IWC - Indian Water Closet • Urinals limited to the institutional

EWC - European Water Closet markets

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 Bathroom Fittings & Accessories : Contents

• Introduction
• Major Products: Bath Fittings
• Major Products: Bathroom Accessories
• Raw Materials & Surface Coatings
• Major Players
• Competitive Scenario
• Outlook
• Company Profile

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 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

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 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 fittings

market
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 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

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 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

Cement paints
14%
Distemper Automotive
Emulsions
18% 6%
4%

Others
4%

Industrial
Enamels /
Varnishes General
47% Industries
7%

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 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, Penta
Butanol

– 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

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 Production Trends (2000 – 2006)
000 tonnes

800 774

750 719 720

700 727
637
650 667
645
600

550

500
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

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 Glass : Contents

• Introduction
• Major Players
• Major Players & Market shares
• Flat Glass Production
• Import & Export
• Glass in building Industry
• Outlook

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 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.)
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 Flat Glass Production : (2001-2006)

Million sq. meters

1400

1200
1104
1000
883
800
740 723
660 736
600

400

200

0
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

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 Export & Import (2001 – 2006)
INR Bn.
5.0

4.4
4.0
3.8

3.0

2.0 2.4
2.6
2.0 2.4
1.5
1.4
1.5 1.9 1.4

1.0 1.7 1.1

1.2

0.0
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

Import Export
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 Lighting : Contents

• Lighting Industry in India

• Major Players & Market Shares

• Major Players & Turnover

• Luminaries

• Outlook

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 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

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 Production (2006)

Quantity : Million pieces

Organized Total
Category SS Sector
Sector 2006

GLS Lamps 550 280 830

FTL 128 48 176
CFL 52 48* 100
Special Lamps 10 4 14
Source : ELCOMA

*SS Sector for CFL also includes import as well assembled CFL

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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.

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 Capacity & Production : (2006-07)

Capacity
– Primary Sector : 51 MTPA (2006-07)

Production, Exports & Imports

2006-07
( 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

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 Madras Consultancy Group
1A, Ananya, No.41/17,
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.in
URL : www.consultmcg.com
www.indianindustryprofiles.com

Copyright © Madras Consultancy Group 2008. All rights reserved

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