The adoption of ready mix concrete (RMC) in the country is gaining pace, albeit slowly. The concept of RMC was introduced in India in the 1950s but remained limited to major construction projects such as large dams. The Bhakra and Koyna dams were some of the early projects where RMC was used. The commercial RMC industry gained traction in the 1990s and its demand has been growing steadily over the past few years. RMC is a type of concrete that is manufactured in a cement factory or a batching plant, in which cement, aggregates (comprising sand, gravel or crushed stone) and other ingredients are weight-batched and then transported to the construction site in a condition ready for placement. At traditional construction sites, these materials are procured separately and concrete is mixed on site with the use of primitive equipment coupled with an extensive labour force. Concrete is bought and sold by volume – usually measured in cubic metres.
Of the total cement used for concrete making in the country, 10-12 per cent is using RMC. This is marginal in comparison to developed countries where 50-70 per cent is through RMC. According to AT Kearney, the market share for RMC is expected to reach 25 per cent by 2025.
RMC is preferred to site-mix concrete (SMC) as the former offers several advantages. RMC is more convenient as it can be used directly at construction sites, is environment friendly, leads to reduced wastage and offers better quality and economy. The greatest benefit that RMC offers is its ability to be customised as per end-user needs. Owing to its superior features, RMC is widely used in non-residential applications, such as commercial, infrastructure and industrial sectors, apart from real estate. It is used in the construction of bridges, dams, roads, tunnels, etc. It finds application in the construction of pools and multi-storey buildings as well.
The biggest demand drivers for the country’s RMC and batching plant segments will be the Indian government’s large-scale infrastructure and housing projects. These projects include the Bharatmala Pariyojana, Sagarmala, the Smart Cities Mission and the Pradhan Mantri Awas Yojana. Government initiatives on the dedicated freight corridors have also provided opportunities for setting up new RMC plants across the country. With rapid urbanisation, the Indian construction industry has witnessed a major move towards complex architectural structures in commercial buildings, elevated driveways, coastal highways, bullet trains, etc., which has further fuelled the demand for high performance concrete.
Industry size and market size
The RMC industry structure is quite fragmented. While about five to six organised players hold a market share of 45-50 per cent, the remaining market is catered to by unorganised local players. Earlier, the use of RMC was mainly confined to metro projects, while the smaller cities used SMC. However, with the growth of the RMC industry, it has also found usage in Tier II and III cities. With the implementation of the goods and services tax (GST) and the Real Estate (Regulation and Development) Act, 2016, a greater consolidation in the industry is expected. RMC attracts a GST rate of 18 per cent.
Broadly, the RMC industry comprises three subcategories of players. First, there exist several core RMC players that are either operating nationally with a presence in multiple cities or locally with commercial operations in only one city. The second category comprises players like ACC Concrete, UltraTech Concrete, etc., that are primarily cement manufacturing companies but have forward integrated their operation from pure cement making into the production and sale of RMC. The third category consists of captive players such as Ahlcon RMC, J Kumar RMC, etc., that are mainly real estate or infrastructure companies setting up RMC plants to meet their in-house requirements.
There are several types of RMCs on offer based on different applications. These include decorative RMC for an aesthetic look and feel, fibre-reinforced RMC for structural applications, fluid-filled RMC used as a protective layer for pipes or cables, rapid-setting type for pre-cast works or early strength development, and permeable RMC for bridges and tunnels.
Issues at hand
One of the key challenges is the limited supply of good quality aggregates with consistency in sourcing. Moreover, the growth of skilled manpower has not kept pace with industry development, leading to a shortfall. In addition, the “freshly” made RMC needs to be placed or used in a fixed time frame as per industry experts. The perishable nature of RMC necessitates the need for the RMC batching plant to be located near construction sites. However, the setting up of commercial plants in metro cities is a challenge due to space constraints and environmental regulations.
Given the growing environmental issues with rapid urbanisation, key players have been focusing on promoting green initiatives through the promotion of green RMC that uses aggregates from or by-products of other industries such as fly ash, ground granulated blast furnace slag, etc. The Confederation of Indian Industry jointly with the Ready Mixed Concrete Manufacturers’ Association and the Quality Council of India has developed GreenPro, a green product certification for RMC, in April 2018. This initiative is supported by the International Finance Corporation. It will further provide a push to the green initiatives of RMC players and help them reduce greenhouse gas emissions from the industry.
The use of RMC is still at a nascent stage in India as compared to that in developed economies. The industry is expected to expand considerably on the back of upcoming infrastructure projects, a boost in construction activity and various government initiatives. The industry is expected to consolidate further with the implementation of the GST. To take this sector forward, a steady flow of good quality aggregates needs to be maintained, industry-specific skilled manpower needs to be developed, and the players need to research and develop technological and chemical solutions to increase the lifespan of the concrete while it travels in transit mixers.