Anil Kulkarni, National Category Head of Concrete, Infra.Market in an interview with C&A

What is your observation on the overall RMC industry in India? How has business been for the company in the last 2 years, post-pandemic?

The RMC market was growing at a CAGR of 7-8% before 2020. Although the initial COVID period had impacted the business, now the economy is ramping up, and RMC volumes are soaring again. Additionally, due to the government’s drive in promoting infrastructure, markets are witnessing a surge in the number of new residential and commercial buildings.

At Infra.Market, the profitability has almost reached pre-COVID levels, and we foresee notable growth nearing. Considerable progress in roads, highways, metro rail, airports, ports, and urban infrastructure is expected, which will lead to increased demand for concrete. The Indian construction industry will witness a mighty move towards complex architectural structures in commercial buildings, elevated driveways, coastal highways, bullet trains, etc. In the past six months, we have supplied nearly 5 lakhs m3 concrete across the country. Furthermore, our tech-innovation expertise has helped us in providing complete access to the information right from batching to delivery status, thus ensuring outright transparency to all our clients.

How has the business been for the RMC industry in the trade segment and non-trade segment?

RMC is traditionally in the non-trade or what we call as the B2B sector, a very small portion of the Business deals with the trade sector. In the non-trade segment, we have seen consistent growth in demand and with all the impetus the governments are providing, it is happy days ahead for the RMC Businesses, I see the Business now growing at pre-covid CAGR’s again.

India has seen spurt in the construction and infra-activities, the RMC sector how does it view?

COVID19 certainly led to diminishing volumes, however, the market is gradually opening, and we have noticed a sudden spike in demand. The volumes have returned to the pre-covid-19 levels or even slightly on a higher side. Owing to consistent government push, residential and commercial are spiking up. There has been an increase in new customers as well as budgetary quotes. The thrust of the government in developing Infrastructure will be a major growth driver in India.

As India has a high quantity and quality of limestone deposits through-out the country, the RMC industry promises huge potential for growth. Your take on this?

Limestone deposits are basically for the Cement producers, RMC manufacturers are the biggest consumers of the so produced Cement from these limestone deposits. Yes, the potential growth is immense, India’s penetration of Cement in the RMC segment is far less as compared to the countries in America and Europe basically because we are more rural and less urban, as and when our urbanization ramps up the consumption of RMC is bound to go up leading to more and more Cement and hence limestone consumed through the RMC route.

Private equity investments in real estate surged 24% YoY (year on year) to US$ 477 million between July 2021 to September 2021.The impact on the RMC industry.

Private Equity investments in real estate grew 24% y-o-y, as compared to the previous quarter where it fell to 45%. However, with recent developments and initiatives by the government, the infrastructure sector is to witness a positive outlook. Being capital intensive in nature, the challenge to fund the projects can be overcome with the help of PE investments. And with the surge in infrastructure projects, the RMC industry is bound to grow. New policies directing towards rapid urbanization of India cities will also lead to RMC plants being set up within the city limits to allow quicker facilitation.

Over the years what initiatives by the government have given a boost to RMC? In what light does the RMC view the current budget? How will it impact the overall RMC business?

The real estate sector in India has undergone many changes in the last years. Some of the policies that encouraged the growth of the sector in the past years have been Pradhan Mantri Awas Yojana, Service Tax Exemption on Construction of Affordable Housing, Foreign Direct Investment in Reak Estate, etc. Recently, Union Budget FY23 addressed the long-term structural reforms focusing majorly on infrastructure developments. The following are the areas of considerable push from the government:

• Contracts of four multi-modal national parks to be awarded in FY23
• Formulation of PM Gati Shakti masterplan for expressway in the next fiscal
• 100 PM Gati Shakti terminals to be set up in the next three years
• Focus on public investment to modernize infrastructure over the medium-term utilizing tech platform of Gati Shakti via a multi-modal approach

All these factors acting as the boosters of the infrastructure industry will lead to increased demand for RMC for the next few years. With the focus of government on smart cities, construction industry in India is blooming and various infrastructure projects are in the pipeline for the next few years including slum-development and rehabilitation projects. All this together contributes to the overall high demand in the RMC sector.

What are the business plans for the company going forward?

We aim to tap into the opportunities put forth by the government and merge it with our expertise to grow the RMC segment at Infra.Market drastically. We are enroute to represent ourselves across the country and promote RMC over site mixed concrete given the benefits it offers including being environment friendly. By the end of three years, we see ourselves in a category-defining position.