Precast to accelerate the growth trajectory
The pandemic that shook the world in no time has disrupted business across segments. Cement, infrastructure, construction all came to a grinding halt. Most of the sector players will have numbers highlighting the severe depression created by the pandemic in their balance sheets. However, there are segments with these sectors that would have greater opportunities smiling at them when the country returns to the business as usual. One such segment, the experts say is the precast. Precast concrete which is one of the most sought after segment in construction because of the various benefits, is expected to pick up momentum. Till now, this segment has had slow growth. Owing to the new derived situation (demand dip, labour shortage, cost-effective ways to run business) put together will lead to construction segment increasing its dependency on precast.
The precast being dynamic - offers increased durability, increased load-bearing capacity especially when the concrete is pre-stressed with cable reinforcement, safer and faster as the casting is done offsite and is cured in a precisely controlled environment. It has the capacity for volume delivery as well. Above all, precast bring down the cost significantly in construction in comparison to the conventional standard concrete. Taking all these into consideration, it is natural for the construction industry to lean towards precast concrete.
Anil Banchhor, Managing Director & CEO, RDC Concrete (India), elaborated on the opportunities emerging for precast concrete. He said, "In the precast segment, post-Covid-19, the opportunity is more because precast requires fewer workers. Many companies would move towards precast construction. The precast industry is slowly maturing, and the growth though was slow. Some residential buildings, especially the low-cost housing, is shifting to precast. Apart from this, there is a lot of scopes for hospitals as the government will be spending a lot in hospital infrastructure. Also, commercial buildings will start moving to precast like hotels, offices etc. will move to precast. This opportunity is better for precast industries."
Devendra Pandey, an industry expert, pointed out, "Demand of concrete would be dependent on so many factors beyond our control currently. But our ability to support the change in technology would impact a shift in the customer bases. Overall concrete Demand will remain proportionately similar, but there will be a shift from the current customer segments towards the precast segment. The percentage of precast supply will definitely increase."
According to a study published in mid-2019 by ReportLinker, a market research solution company,"The precast Concrete market worldwide is projected to grow by $47.8 billion, guided by a compounded growth of 5.4 per cent. And the projection is the precast market would touch $54.1 billion by 2025. With a healthy forecast and leveraging on the emerging opportunity in floors and roofs, the said numbers appeared to be attainable. Floors and roofs segment expected to clock a 6.4 per cent growth. The shifting dynamics will support growth by adding significant momentum to the global growth of precast concrete."
The report also gave a breakup of the contribution of regional market to this projected growth in precast."The US will maintain a 4.7 per cent growth momentum. Within Europe, which continues to remain an important element in the world economy, Germany will add over $1.9 billion to the region's size and clout in the next five to six years. Over $5.3 billion worth of projected demand in the region will come from other emerging Eastern European markets. In Japan, floors and roofs will reach a market size of $3.2 billion by the close of the analysis period. As the world's second-largest economy and the new game-changer in global markets, China exhibits the potential to grow at 7.8 per cent over the next couple of years and add approximately $12.6 billion. Several macroeconomic factors and internal market forces will shape growth and development of demand patterns in emerging countries in Asia-Pacific, Latin America and the Middle East."
India also was upbeat with investment flowing into the country with an optimistic outlook for 2020-2021. One such investment was the announcement of Rs 700 crore investment by the South US-based design and technical construction company Katerra. This investment, the company made in India to set by its second facility near Hyderabad. According to the officials of Katerra, the said facility will manufacture 8 million sq ft of prefabricated building components and fittings every year with robotic assembly line production. The plant was initially expected to be complete by March 2020.
Precast in India, currently, has only specific types of projects. Precast wasn't a major defining driver in the construction segment till now, but, it would be in the future says, industry players. If the construction sector adopts precast concrete at a faster pace, then it is going to be successful in averting some post-lockdown impacts. There are low-cost housing projects that have already been using precast technology. With the use of precast, the floor casting cycle time can be reduced to 3-5 days, which is remarkable. The benefit of time reduction would enable faster adaptation of precast concrete and increase the Demand in the future.
Pandey continued on the challenging the precast segment would need to address post covid 19 by saying, "This is an interesting challenge. One needs to carefully explore the possibility of the adaptation of precast into an existing project. The bigger question here is whether the migration in the design approach is possible or not. It would be difficult for the real estate players and owners to make that decision to migrate into precast in an ongoing project. Existing projects may transition first by starting to use precast wall segments, manholes made out of precast concrete, precast staircases, and so on. Even in existing building design, more precast products can be used compared to the percentage earlier. I feel it would be easier for new projects into precast technology and the change is definitely coming. There is also the possibility of composite construction becoming popular compared to the traditional reinforced concrete format, which is designed using structural steel and concrete together."
Trends in precast
Many of the companies in the recent past have created a portfolio of value-added concrete products that are helpful for the construction industry in terms of technology adaptation towards this changing dimension.
Post-tension slabs: These are currently used in buildings, metro construction, bridges on national highways and cities. There is a lot of post-tension work going on.
However, this segment will emerge and mature. The customer requirement will also change accordingly. Faster curing and early development of strength of concrete will become crucial. There could be more Demand for self-curing concrete so that stocking of elements can be reduced. In short, the technical requirements of the precast project itself will start changing. That will require technically efficient producers who will be able to supply the needs in a timely manner.
Prashant Jha, Chief RMX, Nuvoco Vistas Corp, further elaborated on the trends that are witnessed in the segment.
Large-panel systems: The designation "large-panel system" refers to multistory structures composed of large wall and floor concrete panels connected in the vertical and horizontal directions so that the wall panels enclose appropriate spaces for the rooms within a building. These panels form a box-like structure. Both vertical and horizontal panels resist gravity load. Wall panels are usually one story high. Horizontal floor and roof panels span either as one-way or two-way slabs. When adequately joined together, these horizontal elements act as diaphragms that transfer the lateral loads to the walls.
Frame systems: Precast frames can be constructed using either linear elements or spatial beam-column sub-assemblages. Precast beam-column sub-assemblages have the advantage that the connecting faces between the sub-assemblages can be placed away from the critical frame regions; however, linear elements are generally preferred because of the difficulties associated with forming, handling, and erecting spatial elements.
Slab-column systems with shear walls: These systems rely on shear walls to sustain lateral load effects, whereas the slab-column structure resists mainly gravity loads. There are two main systems in this category: lift-slab system with walls, and prestressed slab-column system.
Modular system: In the case of smaller single units, this system is helpful. Some of the advantages are; a) Entire unit is cast in a factory and installed at site b) Suitable for toilet blocks or individual rooms c) Monolithic casting guarantees waterproofing at junctions.
In the last Union Budget 2020, the government has announced infrastructure projects to the tune of Rs 103 trillion. Besides, the government also provided about Rs 1.70 trillion for transport infrastructure and highways construction. This allocation is expected to strengthen the demand for rural housing and infrastructure gradually. The emphasis given to infrastructure development, 100 new airports and a focus on roads will go a long way to revive concrete Demand.
However, the current infra projects will continue, but at a slow pace initial two to three months, primarily because of the shortage of migrant workforce. Every company would look at completing the projects as fast as possible to tide over the lost time. Most of the infra companies have labour camps attached, however, whether the migrant workers will stay or go back to their villages after lockdown determines the pace of the undergoing infra projects.
Pandey signed off by saying,"We can expect a slow start and a very steep rise in the Demand that is one view, while the other view is a little conservative. Looking at the slower pace of the market, it's a bit hard to project at the moment. We remain cautious and observant. We are ready to serve the industry and the nation as the needs emerge."
However, there could be delays in rolling out the projects, completion of projects under implementation, with demand taking a long time to pick up. As per the latest report released by the rating agency Crisil in the first week of May says "there would be a delay of 12 months or more in the completion of Bharatmala phase 1." However, the report leaves an optimistic note that roads and highways would rebound faster despite sharp losses in the first quarter of FY21.
- RENJINI LIZA VARGHESE