Roofing Materials Market in India a snapshot

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1 Disclaimer This note entitled Roofing Materials Market in India a snapshot has been prepared by e-research and Publications India Private Limited (erpl). This snapshot is intended to provide the reader a flavour of the roofing materials market in India and has been prepared based on secondary research supported by an analysis at erpl. Prior to undertaking any business or investment decisions, further detailed investigations / studies are recommended. erpi does not accept any direct or indirect legal liability of any kind. This note remains erpi s intellectual property and no part may be reproduced or circulated without the prior permission of e-research and Publications India Pvt. Ltd., 2nd Floor, MN Plaza, 15/16, 3rd Cross Street, Kasturba Nagar, Adyar, Chennai , India. For queries or comments, please to office@eresearchglobal.com Roofing Materials Market in India a snapshot Introduction The thriving urban construction sector in India, coupled with increasing disposable incomes in rural areas, is expanding the roofing solutions market to the next generation products. Industry sector is also witnessing a gradual shift towards prefabricated buildings, and is indicating an increased willingness to try contemporary roofing materials that are easy to maintain and long lasting. While reinforced concrete is the widely used roofing material of choice across urban construction and is making inroads across rural belts, other material such as fibre cement sheets, metal roofing as well as PVC and polycarbonate roofing have gained traction over the last few years. As roofing holds a significant share in the construction cost, it is imperative to choose long lasting, durable, aesthetically appealing products that are also cost-effective. Large players have embarked on branding and promotional activities to reach out to customers and build value proposition. Roofing sector also has the presence of several small players who cater to a regional market with a restricted portfolio focusing on any one roofing material. Roofing Market Demand Drivers Housing scenario According to the 12th five year plan ( ), the total shortage of houses in India is estimated at million nos. Of this, shortage in urban areas which impacts the Economically Weaker Sections of the society stood at around million nos. Housing shortage in rural India is estimated at million nos. Pradhan Mantri Awaz Yogna is the flagship programme of the Government of India which has planned a total expenditure of around INR 82 billion during to construct pucca houses in rural areas as well as for the urban poor. P a g e 1

2 Census 2011 estimated that traditional roofing materials account for close to 40% across housing scenario in India. This is largely reflective of the rural landscape which is gradually shifting towards concrete, metal and fibre cement roofing. Concrete roof accounts for 30% of the total roofing demand across the country, followed by metal roofs and fibre cement sheets. Housing scenario in India: Break up by roofing material, 2011 Total: 304 million housing units Concrete 30% Other* 1% Grass/ Thatch/ Bamboo/ Wood/ Mud, etc. 15% Hand made Tiles 13% G.I./ Metal/ Asbestos sheets 16% Stone/Slate 9% Burnt Brick 7% Machine made Tiles 9% Source: Census 2011, Govt of India *include plastics/ polythene roofing material Housing in rural areas is a major demand driver for roofing materials sector and the segment has registered a marked shift in favour of concrete, metal and fibre cement products during the 10 year period between Census 2001 and Census Concrete roof accounts for around 18.5% of the demand for roof in rural areas and this is expected to expand rapidly in the coming years. P a g e 2

3 Grass/thatch/bamboo/w ood/mud, etc. Tiles-Total Burnt Brick Stone/Slate G.I./Metal/Asbestosshee ts Concrete Others* Millions Nos. Rural housing in India: Demand for roofing materials, 2001 & 2011, Million Nos (1.3)% (1.2)% 3.7% 3.1% 5.1% 5.5% 1.8% Source: Census, 2011, Govt of India *include plastic roofing material Rural housing schemes like Pradhan Mantri Awas Yojana and Rural Housing Fund are expected to increase the housing stock in rural areas where modern roofing solutions will be implemented. Urban housing RCC is the preferred choice of roofing solution for the buildings in the urban areas accounting for around 53% of the roofing demand. Metal and plastic roofs are widely used in malls and retail outlets. Polycarbonate roofing for its 1/3rd of weight of acrylic and 1/6th weight of glass is a soughtafter roofing material for residential and commercial complexes. Growing hospitality sector is a key enabler for aesthetically superior roofing material in urban areas. Apart from housing, infrastructure developments including construction and renovation of airports, SEZs, metro rails and IT parks have increased the demand for modern roofing solutions. P a g e 3

4 Industry Scenario Warehousing is a leading demand driver for roofing products in India. Industry sources estimate demand for warehousing to grow at an annual rate of around 9% over the next five years. Growing number of factories, poultry farms, architectural buildings, cold storages and development of special economic zones are other key demand drivers for roofing market with focus on thermal insulation and energy conservation. Increased awareness on green building concepts and phasing out of carcinogenic building material have paved way for the growth of the coated metal roofing solutions. Pre-engineered building concept is gaining ground in the recent time and the need for quality, aesthetically appealing, easy fixing roofing are most sought after. Pre-engineered building (PEB) is an emerging concept, especially among the industries like power, automobile, engineering goods, and among other sectors like logistics, warehouses and infrastructure. Metal roofing players can take the advantage of the growing PEB concept in India. Pre-fabricated metal roof is considered as a viable solution for metro rail roofing. There are around 10 upcoming metro rails projects in India which is expected to increase the demand for such roofing material Product Classification The roofing sector is classified as below: Roofing Sector Reinforced Cement Concrete (RCC) Fibre Cement sheet *Metal Roofing Clay Tiles **Plastics & Others Source: erpl Note: *Metal includes corrugated galvanised iron, corrugated aluminium sheet, galvanised steel sheet, colour coated metal sheet, galvalume sheet Others include asphaltic roofing, red mud plastic, polycarbonate, etc. P a g e 4

5 Industry structure Roofing sector is limited with few large players who cater to the pan India market and several small regional players There are around 20 players in the fibre cement sheet segment in the country, of which top 5 players account for more than 70% of the total market Pre-coated metal roofing (galvanized and galvalume) has both large national players and small regional players Clay tiles segment is highly unorganized and largely catered by small regional players Market overview Indian roofing market was estimated at INR 390 billion in witnessing a year-on year growth on 13%. Of the total market RCC accounted for a major share of around 55% Roofing Market: Break-up by Segment, , (% share) Total Market: INR 390 billion Fibre cement sheet 10.5% Metal 15.6% RCC 54.9% Clay tiles 13.8% Others 5.1% Source: Secondary research P a g e 5

6 RCC is the primary roofing material of choice followed by fibre cement sheet and galvanized iron sheet, the recent years have witnessed a shift towards galvanized and galvalume coated steel products Aesthetic appeal and corrosion resistant properties are driving the demand for metal sheets over the years Segment Details The market for reinforced concrete roofs stood at around INR 214 billion during , accounting for around 55% of the total roofing market in India o Versatility and cost-effectiveness are seen as key advantages of RCC roofs and have a strong preference across residential and commercial spaces in urban areas Fibre cement sheet market was valued at around INR 41 billion in and the segment is expected to grow at around 8-10% per annum o Demand for fibre cement sheets is estimated at around 4 million tonnes per annum o Around 80% of the demand is from rural areas where the product is gaining ground as a substitute against traditional thatched roofs o Most of the fibre cement manufacturers are located in southern states owing to easy availability of cement o Fibre cement sheets are good insulators of heat and sound, durable, water and fire resistant and are also preferred in construction of warehouses and factories Metal roofing market was estimated at around INR 61 billion in and is growing backed by infrastructure developments such as airports and metro rail stations across the country o Structural metal roofing that do not require solid support beneath are garnering interest across infrastructure and other high end commercial complexes o Metal roofing products largely comprise of corrugated galvanized iron sheets which account for around 93% of the demand o Corrugated galvanized iron sheets are widely used in a number of applications such as industry sheds, dairy farm sheds, and poultry farm sheds, etc. P a g e 6

7 o Implementation of Government schemes such as Pradhan Mantri Awaas Yogna which provides financial assistance to the rural poor for construction of a house is expected to expand the demand for galavanised iron metal roof With increased awareness regarding advantages of metal roofing such as offsite manufacturing, recyclability and low maintenance, demand for metal roofs has increased among industrial users o Metal roofs are also preferred in industrial developments owing to the speed of installation as well as better functionality o Recent advancements in sandwich panels which improve insulation and acoustical properties as well as ease of installing accessories such as louvers and roof ventilators have caught the interest of architects o Different types of metal roofing products such as trapezoidal profiled sheets, standing seam roofing, metal shake roofing and cool metal roofing are set to witness demand Metal roofing market: Break up by segments (% share) Total: INR 60.8 billion Aluminium corrugated sheets 3.8% Corrugated Galvanised Iron 92.9% Color coated metal 3.2% Source: secondary research P a g e 7

8 Galvalume sheets or aluminium-zinc coated steel sheet is a recent product segment that offers better value proposition compared to traditional metal roofing o Coated sheets are four times corrosive resistant than the galvanized metal and are also characterised by excellent thermal efficiency and cost effectiveness; pre-coated metal roofing is witnessing a growth rate of 25-30% backed by demand from commercial and public structures Demand for metal roofing is growing across urban areas where better quality, technically advanced roofing solutions are preferred o With limited land availability in cities and metros, more complex structures are being built where metal roofing plays a vital role Clay tiles account for around 14% of the total roofing market and comprise of handmade as well as machine made tiles o These red coloured tiles prepared from hard laterite clay are eco-friendly and cheap and are widely used in rural areas o Mangalore remained a major hub for quality tiles but issues like labour and raw material and emergence of concrete constructions have impacted the segment adversely; clay tiles manufacturers are now concentrated in Kerala o Clay tiles withstand extreme weather condition and have a niche market in urban areas for it aesthetic appeal and weather proofing properties Plastic roofing products including PVC, polyethylene and polycarbonate roofing sheet have a small market registering a good growth o High strength, flexibility, light transmission and better rigidity are key features of polycarbonate sheets. These sheets are widely used in industrial roofing, parking area, verandah, green houses, walkaways, etc; commonly used varieties of polycarbonate sheets are clear polycarbonate and foam back polycarbonate sheets o Among other roofing materials, asphalt roofing is preferred for its softness, strength and flexibility o Red mud plastic sheets are widely used in chemical and food processing industry due to its resistance to organic solvents like acids, alkali, salt, etc.; the sheets also act as a heat isolation agents by converting ultra violet rays into thermal energy P a g e 8

9 Key Players Everest Industries Ltd., Hyderabad Industries Ltd., Visaka Industries Ltd., Utkal industries and Ramco Industries Ltd. are the key players in the fibre cement sheet market accounting for over 70% of the total market Tata Bluescope, Lloyds Insulations, Pennar, Kirby, Hindalco, Interarch Building Products are some of key players in the metal roofing segment Proflex Systems, Multicolor Steel, Paramount Infrastructure are amongst the other noted metal roofing players Bangalore Tiles Company, The Calicut Tile Company, Dadoo Brink Kilns Pvt. Ltd. are some of the noted clay tiles manufacturers Recent Developments and Trends Metal roofing material are witnessing intense R&D focusing on coating materials - aluminium-zinc coatings and nanotechnology solar reflective coatings are recent product variations Integrating new generation thin photovoltaic solar panels to roofs will gain importance in the coming years given the Government s effort to promote solar energy in public buildings P a g e 9