There is cautiousness in the current market
It seems the market is seeing a ready mix v/s precast tussle. Is this real, or do you see both co-exist? What are your comments on this?
There is no real tussle. Precast has its own future. And precast, as an industry, is at a very nascent stage. Even though it should have grown faster the current levels, we, as a country, have a different outlook on technology and its adaptation. We have been slow in ready-mix, we have been slow in precast as well. Ready-mix is always ahead in the race, which is very logical. Ready-mix, in one sense, will enable the precast industry to its proper place. So I don't see them conflicting.
Does that mean these two will co-exist and grow in parallel?
Definitely, and precast industry can be one of the sectors which ready-mix concrete would be catering to. Precast may evolve as one of the growth drivers of concrete mixers.
With global slowdown casting a shadow over Indian industries, especially on the infrastructure segment, where do we stand now?
Infrastructure is a segment that can take out some of the difficulty, which we are in currently. But we are in difficult times, and it's hard to say when we can see a respite. However, if investments are infused in the infrastructure segment, the possibility is that when infrastructure improves, the cascading effect will automatically pull other sections along with it.
The government had announced stimulus packages in terms of tax rebate and infusion of liquidity etc. How does this going to help the segment?
Well, for the short term, I don't see any significant change. But in the medium and long term, it can have an impact. But there should be other factors along with these to boost the industry because this in itself is not sufficient. There is a big cash-flow problem in the industry, and the building sector is appalling. The money transactions and the overall cash flow in the industry are very poor. The steps which have been taken till now have had a temporary outlook or the emotional impact. There have to be some more tangible measures for things to really change.
Does that mean you expect more measures from the government to make it more fast-paced?
I'm not an economic expert, so it very hard to say so. The only thing is the current situation requires a change from many directions. We are talking about the overall economic situation and construction segment dependent on that. A close look at the market would reveal that there is a challenging phase in the construction industry. The industry experts, business leaders, and others don't seem to have a very consistent view of what the solution could be.
Which are the major growth drivers for concrete?
For the ready mix, real estate remains the primary growth driver with commercial and residential construction. At last for the last two years infrastructure has been a significant anchor for ready-mix concrete volumes. That means there were consistence volumes, good payment cycles that was coming. So even though volume-wise it was not the most significant sector, which we are serving; still, it becomes an anchor to have a good kind of order profiles. But now with infrastructure segment also slowing down, you know this is another kind of situation. There is an overall the receivable getting high and the over draft (OD) cycles are longer.
How were the first two quarters for the company?
Though we have grown in volumes but we are not up to mark as per our budgets in comparison to the last year. So we are being cautious as some companies in the industry are getting into a very difficult situation. One need not be only growth conscious but also cautions owing to the market conditions.
Efficiency improvement is a crucial element. What is the improvement we witnessed in the products in the last 3 years in the ready mix concrete industry?
Most of the established ready-mix companies use a computerised system for their process, which are much interconnected. Despatch, mix designs, statistical control, vehicle tracking systems, a combination of such an expert system is being used currently. These are used in order to assure the customer a proper mix combination, adequate degree of control, visibility of delivery is one change. The other difference is the availability of specialised materials today - micro fine cement material, micro-fine fliers, very high range classifiers, integral waterproofing compounds. And as a result, we produce much better concrete.
Devendra Kumar Pandey, Technical Head RMC business in UltraTech, is with the Aditya Birla Group's Cement division for almost a decade and a half. Before elevating as the head of RMC, he served as Zonal Head- Technical Services for over 11 years. In his previous stint, he was part of RDC concrete as Senior Technical Manager for close to 10 years. Academically, he has a Civil Engineering degree. He also persuaded theological studies from the Maryland Bible College and Seminary.