CEE Jul-Sep-2012

Construction ofRailway Terminal Building in London The constructions as above involve use of pre cast columns, beams, and roof panels, which are produced off the site and are simply brought and assembled at the construction sites. This practice is still at its very nascent stage in India and is unknown to the vast majority of builders and contractors. Since the concrete is a perishable product and it loses its freshness and strength with delay in use, the preference is always for the concrete which is freshly mixed. Why Customers have not fully adopted Commercial RMC? In a few interviews with this author, some of the leading builders and contractors described following three reasons to not to use commercial RMC 1. Uncertainty about Quality - they do not trust RMC manufacturer who is producing concrete away from their construction sites 2. Uncertainty about delivery - they do not trust that the RMC manufacturer will deliver in time 3. Cost - site mixing is perceived to be less expensive Based on above factors, any builder or contractor who has reasonable big construction project and has sufficient space at the construction site prefers to put a batching plant on the construction site itself, rather than depend upon any commercial RMC manufacturer to supply the concrete. This practice is more prevalent in North & East where the construction sites are reasonably large and space is not a constraint. However, the big metropolitan cities in West & South like Mumbai, Pune, Bangalore, Chennai etc. are exceptions to the above due to following reasons Factory Building Construction 1. Construction sites typically in these cities are much smaller and hence setting up of onsite batching plant is not feasible 2. Municipal laws related to keeping of construction materials on site and the disposal of construction waste material are much more stringent and are enforced. 3. High rise construction demands use of concrete in higher grades which requires technical expertise 4. Difficulty in sourcing of construction materials like aggregates and sand in these cities Hence it is in these cities, the commercial RMC is much more successful as compared to anywhere in India. Is RMC business a natural extension of cement? Globally, big cement companies have significant presence in RMC and significant portion of their sales is from this business. This can be seen from the following table ----- Cement % of total % of cement Company Sales from through RMC Lafarge Holcim Cemex RMC 32% 37% 34% 8% 11% 10% As is seen from the table that RMC not only contributes significantly to sales but it is also a channel for cement distribution. It should be noted here that these global cement giants have dominant share in cement market mostly in Eu rope and Americas, where the cement demand is already saturated and the construction practices involve use of precast concrete. Hence the strategy for these cement manufacturers in these market is first to 3 \ 1 .. ... ..