RMC Industry Analysis
READY MIX
CONCRETE:
Readies Itself to
Take Over the Industry
Chaitanya Raj Goyal
58
The Masterbuilder - July 2012 · www.masterbuilder.co.in
RMC Industry Analysis
C
oncrete is truly an amazing
building material. There aren't a
lot of materials that have persisted for millennia while hunger for this
commodity has only become more ravenous. We're completely surrounded by
concrete today. The world is practically
wrapped in it. However, the Ready mix concrete business in India is still in its infancy.
The Ready Mix Concrete industry is
perhaps among the fastest growing
sector in India. In the coming years the
country will witness increased construction activity with faster development in
our cities and infrastructure. RMC is
expected to play a very important role in
the scenario. As India builds its infrastructure, the RMC industry is steadily
gaining pace as the most viable option
to speed up construction.
Over the next 5 years, the size of the
RMC industry is estimated to grow from
INR 155-160 billion in 2009-10 to ` 395400 billion in 2014-15. Though the penetration of RMC is higher in the metropolitan cities as compared to all India
average, there is scope for further penetration of RMC in these cities with higher
verticalisation and expected infrastructure development.
Witnessing a decade of rapid growth
In early 70s both pricing and distribution of cement were controlled due
to shortage of supply, Ready mix concrete technology could not be implemented as investors felt that RMC plant
will starve due to non-availability of
cement. The levy of additional taxes &
duties on RMC, entry tax, excise duty
also contributed to the slow development of the concept. In the late 80s,
after cement was fully de-controlled,
RMC was manufactured on a commercial basis.
RMC industry has been on a continual growth path ever since the first
commercial RMC plant was established
in Pune in the year 1991. The year 1993
saw the entry of two corporate companies, ACC Cements and Unitech construction starting their commercial RMC
plants in Mumbai to commercially exploit
the potential of this sunrise industry. Ever
“It is safe to conclude that we
have not achieved as much as
we should have. Because of
added component of
transportation cost, RMC will
always be costlier than sitemixed concrete of identical mix
proportions. Once the owners
of construction projects are
ready to pay the extra cost to
ensure quality, speed of
construction, lower the lifecycle cost and reduce C&D
wastes, RMC will have its rightful
place in the construction sector.”
Dr. A. K. Mullick, Former Director General,
National Council for Cement and Building Materials
since, the industry has grown leafs and
bounds and as we see today the industry
is growing and geographically spreading to all the corners of India covering,
metros, tier 2 cities and even tier 3 cities
as real estate and infrastructure projects
line up in developing urban regions.
Today commercial RMC plants are
present in more than 90 cities and towns
across India and there are numbering
more than 2500 RMC plants in operation in cities, and various projects locations across the country.
Production & trade: Current market
statistics
The production capacity of a readymix concrete plant depends on the
capacity of the batching plant. An average plant has a production capacity of
30 cubic meters per hour. The plant will
be able to produce about 90,000 cubic
meters a year. But the ready mix concrete (RMC) business in India has been
facing continued hiccups over some
time now. Established players have to
take on intense competition from smaller
region-specific companies. Major RMC
companies are thus reworking strategies.
“The current slowdown has started
slowly affecting the RMC industry in
terms of reduced production volumes
and cash flows. The main raw material
being cement, the periodic fluctuations
in cement prices and higher transportation costs due to fuel price rises have
also affected the price realization for
RMC Unit established by Madras Cements in 1998 has been producing concrete customized to the unique
requirements of its customers
www.masterbuilder.co.in · The Masterbuilder - July 2012
59
RMC Industry Analysis
Ready Mix Concrete plant from ACC
the industry.” remarked Dr. Aswath,
Technical Advisor RMCMA-Karnataka.
In India, ready-mix concrete
accounts for 4-7 per cent of the cement
consumption as the economy fluctuates. In contrast, 70 per cent of the cement
produced in a developed country such
as Japan is used by the ready-mix concrete business. Currently RMC conversion ratio of Europe is 65%, of USA is
75% and that of UAE is 90% of cement.
The growth of ready-mix concrete business in India is predominantly driven by
demand from metros and Tier-2 cities.
But now, since the focus has shifted to
Tier-3 and-4 cities, the demand for it
has shown a steady increase.
The total concrete market in India is
estimated at 300 million cubic meters
per annum of which the plant produced
share is less than 35 million. Its share is
expected to go up gradually from the
present level of less than 6 per cent of
the total cement production to the global
average of 70 per cent, industry players
say. “RMC is my undoubted preference.
Besides savings in cement, there is a
full control on the quality of the concrete
without sacrificing the speed while site
mixed concrete is the slave of the labor
availability and end results on large
volumes are not encouraging” said Mr.
Ashok Dalwani, COO- City Head, Nirmal
Lifestyle Ltd.
60
Major obstacles hindering the growth
Despite the growing acclamation
there are many hurdles in the healthy
growth of this industry. A RMC plant
“Two Indian experts have tried to
estimate the future growth
potential of RMC industry in the
country. Basing their estimate on
the cement consumed through
RMC route, they postulate that the
percentage of cement consumption
through RMC may reach the 10%
mark by 2013-14. Thereafter, the
growth may be faster and the
cement consumption through
RMC may reach the 25% mark
by 2022, when the total number
of commercial RMC plants in the
country will reach 1,516.”
has to be located in an area where
Concrete consumptions are there, as
the concrete has to be transported. Also
good water source at the plant site is a
prime requirement because in case of
non-availability of potable water in and
around the location of plant, water has
to be transported from distant location.
In Mumbai, growth of Ready Mix
Concrete is slow as compared to
Bangalore and other cities as its use
has been made compulsory by their
government. RMC also attracts sales
tax of 15.8 per cent. Soon, more states
will start levying sales tax on RMC. For
example, today, Delhi charges 10 per
cent sales tax on RMC whereas in
Karnataka it is 12 per cent.
Government help is extremely
necessary for the growth of this sector
and Government specifications for
CPWD and PWD jobs should include
Ready mix concrete as a mandatory
item. Moreover, Tax breaks are required
for the growth of RMC. Also, developers
/contractors should be discouraged from
piling up materials like metal, sand etc.
on roads/foot paths. Government bodies,
private builders, architects/engineers,
contractors, and individuals should be
made fully aware about the advantages of using ready mix concrete.
Said Mr. Vijaykumar Kulkarni, Principal Consultant, RMCMA, “Two Indian
experts have tried to estimate the future
growth potential of RMC industry in the
country. Basing their estimate on the
cement consumed through RMC route,
they postulate that the percentage of
cement consumption through RMC
may reach the 10% mark by 2013-14.
Thereafter, the growth may be faster
and the cement consumption through
RMC may reach the 25% mark by 2022,
when the total number of commercial
RMC plants in the country will reach
1,516.”
RMC sector: Key players target fasttrack growth
Vijaykumar R.Kulkarni
Member Managing Committee &
Principal Consultant, RMCMA
Immediate Past President, ICI
The Masterbuilder - July 2012 · www.masterbuilder.co.in
Today's fast-paced construction industry demands top quality products,
delivered efficiently and on time. Many
project managers prefer ready-mix con-
RMC Industry Analysis
“The current slowdown has
started slowly affecting the
RMC industry in terms of
reduced production volumes
and cash flows. The main raw
material being cement, the
periodic fluctuations in cement
prices and higher transportation
costs due to fuel price rises
have also affected the price
realization for the industry.”
Dr. Aswath
Technical Advisor RMCMA-Karnataka
crete to on-site mixing, as the product
is made with more precision. Anticipating a huge potential for the product,
several major manufacturers of cement
have launched ready-mix concrete.
The Indian market for Ready Mix
Concrete has been showing a consistent positive growth, year after year, in
spite of a few policy hurdles on the way.
With the big infrastructure projects
slowly turning to RMC, experts in this
segment predict a business growth
rate of 25% in India.
The increased use of RMC, as
against the sluggish cement market,
has made local producers as well as a
host of major international players focused on the RMC business; Holcim,
Lafarge, Heidelberg, etc. to name a few.
With major investments flooding into
this segment, the focus has now shifted
to increasing the brand presence in the
shortest possible time. The strategy is
to have a well spread network of RMC
plants, through timely execution of
greenfield projects across the country.
Holcim, a major player in this segment, through its local associates ACC
and Ambuja Cements, has already taken
dynamic steps to revolutionize this industry. Other big players that dominate
the Indian market are Ultratech, RMC
India (Prism cements), Godrej and Boyce,
India cements, Madras cements, Lafarge
(which overtook the L&T RMC business last year for INR 1450 crore), RDC
concrete, Ahlcon RMC, IJM concrete,
Bharath cement products RMC and CI
concrete India.
The National Ready Mixed Concrete
Association (NRMCA) had launched
certifications for both ready mixed concrete industry facilities and professionals involved. These certifications have
provided a competitive edge in the industry, showing customers and regula-
Location of plants play vital roles in overall project costs.
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The Masterbuilder - July 2012 · www.masterbuilder.co.in
Lafarge RMC plant at Thane, Mumbai
tory agencies that certified producers
have an understanding of and support
measures to provide the highest quality
RMC in the safest and most efficient
ways possible. There are about 260
RMC plants that have been certified by
the association.
“RMCMA has taken enormous efforts
in evolving a quality scheme for RMC
and implementing the same in different
parts of the country. Two of the world's
leading organizations dealing with readymixed concrete, namely the NRMCA,
USA and ERMCO, Europe, have highly
appreciated the work done by the
RMCMA.” said Dr. Aswath, Technical
Advisor RMCMA-Karnataka.
Innovation and technology trends
Today the entire RMC process is fully
computerized, leaving no scope for
human errors. All the control systems
are Windows based. Cement and other
raw material are checked as per the
quality plans of the companies. All the
raw materials are stacked in separate
bins and are stored under cover so that
aggregates are not exposed to direct
sunlight and environment pollution.
Cement, Fly ash, Slag etc. are stored
in separate silos for better control on
recipe and handling of fly ash and slag
are done from closed bunkers to silos
directly. Also, separate weigh-batchers
are provided for each ingredient like
cement, water, admixtures and aggregates. The weighing is done on sophis-
RMC Industry Analysis
ticated electronic weigh batchers. Precise weighing of all materials is done
through electronic load cells made up
of special alloys.
Moreover, homogeneous mixing of
concrete is ensured by use of special
high-efficiency mixers like pan-type or
turbo-twin shaft mixers and a fully equipped onsite plant laboratory is available
at each plant. A Sprinkler system is
installed to ensure temperature control
of aggregates in hot weather.
In line with NRMCA's focus towards
environment and eco-friendliness all
member silos are installed with bag
filters and level indicators to avoid any
kind of pollution and processes are in
place for effective and periodic maintenance and calibration of all critical
components. Also, laser sensor and
moisture control are used for a stringent
quality assurance while well trained and
experienced engineers are available at
every plant to take care of the quality of
concrete.
Recently ACC Concrete introduced
an innovative concrete solution M100
grade for construction of high intensity
towers. It is for the first time in the world
that M100 was manufactured without
natural sand but by using fine aggregates. With this innovation ACC Con-
“RMC is my undoubted
preference. Besides savings in
cement, there is a full control
on the quality of the concrete
without sacrificing the speed
while site mixed concrete is the
slave of the labor availability
and end results on large
volumes are not encouraging.”
Ashok Dalwani
COO-City Head, Nirmal Lifestyle Ltd.
64
RMC plants today, are mostly if not fully automated. This helps in the timely and speedy delivery of goods.
crete has become the only ready mix
concrete company in India to offer
specia lized solutions for high intensity
towers.
Future: Cementing the growth
If you've noticed a gang of laborers
reminding you of the past century, standing in line and passing head-loads of
concrete mixture up a stairway at a
construction site, no proof is required
to underline the rudimentary systems
that continue to prevail in a nation's
infrastructure sector.
With the concern over liquidity there
has been a general slowdown in both
real estate and infrastructure projects.
Many of the high-end residential projects, especially in metro cities, have
been delayed. Unfortunately, only these
projects depend on RMC as these buildings come up generally in congested
residential areas.
While China has embarked on a
furious pace of construction building
express highways and high-rises galore,
India seems to lag. For a country focused
on development, it is imperative to
mechanize its infrastructure creation.
Most countries of the world have banned
head-load supplies of concrete at construction sites and insist on pumped
concrete. The concept of using site-mix
concrete is thus slowly fading away
across the world.
With RMC you can achieve almost
15.5% savings in construction costs in
terms of factors such as quality and
The Masterbuilder - July 2012 · www.masterbuilder.co.in
wastage-avoidance. One reason why
India is beginning to shed its dependence on manual concrete mixing is the
penalties now associated with infrastructure projects. Delays cost the builder
now, in contrast to even a few years ago
when the builder would pass on cost
escalation to the buyer in case of a
delay in the project.
“It is safe to conclude that we have
not achieved as much as we should
have. Because of added component of
transportation cost, RMC will always be
costlier than site-mixed concrete of identical mix proportions. Once the owners
of construction projects are ready to
pay the extra cost to ensure quality, speed
of construction, lower the life-cycle cost
and reduce C&D wastes, RMC will have
its rightful place in the construction
sector.” said Dr. A.K. Mullick, former DG,
NCBM.
India is in fast-forward mode and
time is of essence. Players like BPOs
often want to start operations straight
away and have no time to wait. All this is
tipping the scales in favor of use of
ready-mix concrete, and mechanized
construction equipment at sites. So we
conclude that if the quality of concrete
is something that you cannot compromise on in your project owing to many
critical factors at stake, RMC is the way
to go!
Photo Courtesy
www.ramcocement.in, www.tradeindia.com
www.aquariusengineers.biz, www.lafarge.com
www.conmatindia.com