Construction chemicals industry needs to reach out to all stakeholders

Construction chemicals (CCs) are a broad class of products that play an enabling – nay essential – role – in modern construction, be it houses, bridges, tunnels, roads, industrial floorings etc. In spite of touching many lives – to some extent or the other – few know the industry.

The range of products the industry produces is vast and an incomplete list would include concrete admixtures & additives, grouts & caulks, coatings & floorings, sealants & adhesives, protective coatings & fibres etc.

Great benefits

In their simplest form, CCs enhance a basic material as concrete, produced in hundreds of millions of tons. In a more sophisticated form, they protect constructions from exigencies posed by the environment (keeping out water, heat & cold); enhance performance (aesthetically & functionally); and extend the life span of constructions. They play a key role in saving energy during construction and use, including by allowing reduced usage of cement, amongst the most carbon-intensive materials.

Thanks to these chemicals, it is quite today possible to extend the life of modern construction far longer than in the past and allow governments to legislate standards of longevity, safety and performance. Significantly, CCs also breathe new life into old edifices, including those of archaeological importance.

Types of products

The biggest category of CCs is concrete admixtures and additives. These provide concrete with enhanced properties such as improved workability and higher strength, to cite two, and allow it to be customised to the geography where it is in use. This segment has grown significantly thanks to increasing use of pre-mixed concrete (in contrast to concrete mixed on site) and the construction industry’s preference for pre-cast units, to build taller, slender buildings. Innovations in the chemistries deployed now permit significant reduction in the cycle time (between moulding and demoulding of concrete), allowing speedier construction than in the past; allow realisation of compression strengths comparable to steel; and permit concrete to be pumped hundreds of metres up, like a liquid!

Repair of concrete structures is another important market opportunity for CCs – all the more in India, where quality of construction often leaves a lot to be desired, and the sight of naked steel exposed to the elements surprises few. New techniques, using pre-packed sprayable materials have emerged, with inherent quality control and high productivity, obviating the need for patchy hand laying.

In the area of coatings, to cite another example, CCs’ industry has now evolved advanced materials that face up to harsh chemical environments. Water treatment plants, to cite one opportunity, are now being built indoors in many developed countries (to obviate foul odours), and the concrete structures need to resist highly acidic environments, with pH as low as 0.5. In these conditions, generic epoxies or conventional lining technologies will simply not work, but the industry has innovated high performance breathable materials that do. Similarly, water-proof membranes now make it possible to build deeper basements for parking, while fast setting sealants can quickly plug leakages of tunnels and even under water structures.

Business dynamics determined by construction industry

The CCs’ industry is usually lumped into a broad category of speciality chemicals – all service- and customer-oriented – but this glosses over nuances in the industry.

For sure it shares many of the issues and concerns impacting the broad speciality chemicals industry: fluctuating prices of raw materials; slowing demand in developing economies; growing competition from emerging markets; rapid commoditisation; and mounting regulation, due concern on the fate of the chemicals in the environment – to cite some.

Aside these, are issues unique to the industry. Prominent amongst these are its relationship with the much larger construction industry, and its ability to deliver effective solutions – not mere products – to the market in a profitable and sustainable manner.

Construction chemicals in India

Growth in the construction chemicals industry ties in with broad economic growth, and it is investments in infrastructure and housing that provide the opportunities. Typically, CCs account for less than 2% of the cost of a quality construction, although this figure can go up in some cases. The business is significant in size in developed economies, but mature, and much of the growth will come not from new constructions, but from maintenance of old ones. This translates into greater opportunities for products like adhesives and sealants, and less for concrete admixtures and additives. In emerging markets, it is just the opposite.

While the CCs’ industry is well established in India, an accurate estimate of its size is hard to come by. A figure of about Rs. 1,700-crore is bandied about, but needs to be taken with a pinch of salt. As a pointer to its potential, it is noteworthy that the construction industry is many hundred times its size!

Four players – Sika, Fosroc, Pidilite Chemicals and BASF – account for about three-quarter of the Indian market, with about 200-odd producers vying for the rest. A large portion is accounted for by concrete admixtures, leaving a small amount for more speciality products.

What can change this situation?

That the potential for construction chemicals is large in India is a given. But there is much that needs to be done – by industry and government – for this to be realised. For a start, the industry needs to get down to the task of training the thousands of ‘applicators’ that deliver the solution to the customer, by providing the right advise on choice of product, application technique etc. The industry has clearly not emphasised this enough, although the market leaders are coming around to do so. This can be done individually by the companies, but it will be far more pragmatic for the newly formed industry association to take up the task.

The industry will also have to engage more effectively with its ‘big brother’ – the construction industry – and a common front will certainly provide better leverage. There is a unique disconnect in India between the investor (the builder of the asset) and the actual user (such as the home buyer), which has marred development of quality construction, and this needs to be bridged through relentless dialogue and rigorous demonstration of the magic of construction chemicals. There is fairly widespread belief in the construction industry – except possibly ones serving high end markets – that CCs are dispensible and expensive options. The challenge for the industry will to prove it is indispensible and a sound value-proposition.

The government too has an important role to play: setting the standards for quality and more important implementing these rigorously.

Sixty years after independence, the citizens of India have a right to demand a roof over their heads and a facade that does not leak. The construction chemicals industry is too small to be able to influence do anything about the first, but can surely contribute its mite to the second!