Ready mix concrete (RMC) Market in India

Ready mix concrete (RMC) Market in India

Introduction

Ready mix concrete consists of cement, aggregates, water and other ingredients, which are weighed and batched at a centrally located plant and directly placed at the construction site, without undergoing any further treatment. Operations are carried in factory-like conditions and are completely automated. Hence, RMC is a value-added, semi-finished product, and results in superior quality concrete.

RMC is used extensively in many countries, such as the US, Australia, New Zealand and England, where 70-95 per cent of all the concrete comes from central batch plants. In India, a few large projects have operated RMC plants for many years. However, the first commercial RMC plant was set up in 1992 at Pune.

Demand

Main factors influencing domestic demand for RMC:

·        Consumer (contractors and engineers) education by RMC suppliers

·        Competitive pricing of RMC could lead to higher offtake, if the price difference between RMC and SMC (site mixed concrete) is reduced

·        Emergence of high cement consuming centres around the metro cities

·        Increasing quality consciousness of the user segment

·        Entry of multinational construction agencies and foreign consultants

·        Entry of private players in infrastructure projects (RMC demand from sub-contractors is likely to improve, if the government sub-contracts infrastructural construction projects on a turnkey basis to contractors, who are responsible for material supplies)

·        Increased supply of the product would result in higher offtake. At present, there are very few RMC suppliers in India.

Reasons for the retarded growth in RMC consumption

Initial controls on cement pricing and distribution did not benefit the RMC business; owing to the shortage of cement (cement is an important component of RMC). Besides, having easy access to cement, RMC also requires technical competence to manufacture the concrete (to ensure mixes with the desired properties). Presently, usage of RMC is restricted because of its higher price vis-à-vis SMC, and the inadequate facilities at construction sites to utilise RMC effectively. In addition, in India, labour is less expensive, as compared to RMC; as a result, most medium and small-scale builders opt for the conventional method of SMC. Logistics prove to be another hurdle for RMC, as it is difficult for RMC trucks to pave through small and narrow roads where the building is being raised. These agitator trucks being very huge, occupy a large part of the road, causing traffic bottlenecks. This apart, the additional taxes on RMC prove to be an impediment.

Also, new marketing initiatives need to be undertaken because either users are unaware of the product or are not convinced of its benefits. This is important, as RMC supply should match the potential demand. If supply is less than demand, then potential business is lost. However, if supply exceeds demand, per unit cost of concrete increases, due to idle capacity. Moreover, RMC is considered economically viable only if it is sold within a radius of 30-40 km from the plant. If the distance between the plant and construction site is more, the wet concrete would harden in the mixer itself.

The only positive development has been the mandatory usage of RMC in time-bound projects.

Process

Cement is stored in silos, and aggregates (sand and stone chips) are stored in stockpiles or hoppers. These are then transported to an elevated tower for batching. The batched materials are then fed into the mixer, where they are mixed at a regulated speed, in order to obtain the concrete mix of the desired quality.

Plant and equipment

A typical RMC facility includes a central batching and mixing plant, revolving transit mixers, and concrete pumps and conveyors.

Following operations are carried out at the central batching and mixing plant:

·        Storage of materials

·        Weighing as per the required proportion mix

·        Discharging the weighed materials to the mixer

·        Mixing

Batching and control operations are completely automated. A batching and mixing plant can store around 100 mixes (a mix is a particular proportion of cement and aggregates).

The revolving transit mixer could be a truck mixer or truck agitator, which is used to transport RMC to the construction site. The mixer continuously agitates the mix to prevent early stiffening.

Concrete pumps and conveyors are used to pump concrete at the construction site.

The daily output of a RMC plant is not directly dependent on the capacity of the batching unit; instead, it is influenced by the per truck capacity, number of trucks and the daily number of trips. The daily number of trips is determined by the transport time, which depends on the distance between the RMC plant and construction site, transportation bottlenecks and road conditions. In general, three round trips are undertaken daily.

Types of RMC

There are two types of RMC:

·        Central mixed RMC

·         The mixing is done at the central plant. The mixed concrete is transported in an agitator truck, which revolves slowly, in order to prevent segregation and early stiffening of the mix. In most developed countries, 70-95 per cent of all concrete comes from central batch plants.

·        Transit mixed RMC

·         The materials are batched at the central plant. However, they are mixed in a mixer truck, at the site, or mixed immediately before the concrete is discharged.

Advantages of RMC

RMC offers certain advantages over site mixed concrete (SMC)

·        Quality control: RMC ensures quality (in terms of strength, durability and performance), as all the constituents are weighed in the required proportions and mixed at the RMC unit. This is especially useful for projects that require high quality control. Moreover, the quantity of additives (fly ash, plasticisers and retarders) can be monitored, in order to ensure superior quality of the cement.

·        Faster speed of construction: This is due to the continuous mechanised operations, which is especially important for large, time-bound construction projects.

·        Eco-friendly: RMC is considered to be a 'clean product' due to the absence of used cement bags and dust at the construction site.

·        Convenience for congested sites: RMC eliminates the need to stockpile the raw materials, which are used to make concrete at the project site.

·        Lower wastage: Cement wastage is minimised due to bulk handling and storage.

·        Simplifies procurement and storage of raw materials: The user is relieved of logistics of supply and storage of multiple raw materials at the site.

·        Reduces manpower requirements: Manpower expenses are reduced due to lower labour and supervisory requirements.

·        Range of concrete grades: The RMC plant has the flexibility to manufacture a wide range of concretes, due to the computerised batching process.

·        Correct proportions of ingredients: Computerised batching operations result in accurate proportions for the various raw materials.

RMC market in India

RMC is still in a very nascent stage in India, as only around 5-10 per cent of cement production is converted into RMC, as against 70 per cent in the developed countries. The present capacity of RMC industry in India is 22.4 million cubic metres.

Reportedly, the growth of RMC is predominantly driven by the metro cities. Bengaluru is the largest market for RMC owing to the many construction activities in the city (IT campuses, flyovers and government sponsored infrastructure projects). Bengaluru continues to lead the consumption of RMC in the country. High consumption in Bengaluru has led cement majors like ACC Ltd, RMC Limited, Grasim Industries, and L&T to set up RMC plants in the city.

Essential requirements to set up a new plant

·        Adequate water supply at the plant site. If potable water is not available in and around the location of the plant, water has to be transported from distant locations, thereby pushing up costs further.

·        Concrete consumption around the site, as the concrete has to be transported.

Players

As on March 31, 2007, large players in the domestic RMC market are UltraTech Ltd, RMC Readymix (India) Pvt Ltd, Grasim Industries, and ACC with market share of 30, 14, 13 and 8 per cent, respectively. These players account for around 65 per cent of the market share in India.

In May 2008, Lafarge bought out UltraTech Ltd's (erstwhile L&T Ltd) ready mix concrete business for Rs 14 billion. Lafarge would be buying out 58 concrete plants of UltraTech, which have an estimated volume of 4.1 million metric cubic capacity. Earlier in the year, Lafarge had started its first ready-mix concrete operations in Raipur, Chhattisgarh.