Sectors such as automotive, power, logistics, pharma, FMCG, and capital goods provide huge growth opportunity for PEB in India.
New analysis from Frost & Sullivan (buildingtechnologies.frost.com) Analysis of the Indian Pre-engineered Buildings Market, finds that the market earned revenues of INR 52,970 million in 2012 and estimates this to reach INR 136,120 million in 2016, growing at a compound annual growth rate (CAGR) of 26.6 percent.
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The structural steel buildings market in India was around 5.0 to 5.5 million MT in 2011, of which around 9.5-10 percent i.e. 537,176 MT accounted for the PEB market in India. It is expected that the market in terms of volumes will reach 900,000 MT by 2016, growing at a CAGR of 11.1 percent.
Key challenges include increasing cost & shortage of skilled manpower, presence of alternative building structure (both steel and concrete) and fluctuating raw material (steel) prices which account for 55 to 60 percent of the overall cost, will certainly affect the price trend and impact the profit margin of the supplier in the long run as competition intensifies. These challenges shall be directly attributed to the lower penetration of PEB in India.
"The PEB market is strongly associated with investments and growth in the industrial and commercial sectors. "The new potential application areas for PEB in the next few years will include power plant structures, factory buildings, commercial buildings (offices and retail malls), warehouses, and metro stations," noted Frost & Sullivan's Senior Research Analyst.
The Government of India has set a massive target for developing infrastructure in the 12th FYP (2012-17) at an estimated cost of INR 40,900, 000 million, of which nearly 33-34 percent have been allocated for the power sector, with an additional target of 90,000 MW. Currently the thermal power capacity stands at 140,976 MW, with the proposed capacity addition of 50,000 MW during the 12th FYP, it will provide huge growth opportunity for PEB in this sector.
The commercial building sector in India is estimated to reach a target of 20.44 billion square feet by 2030 from 7 billion square feet in 2010. It is expected that nearly 34 percent of 2030 target had already been constructed and about 66 percent of the building stock is yet to be constructed.
With manufacturing activity increasing in the last few years, logistics has gained equal importance in order to provide better goods at lesser cost. It is also observed that India has around 7500 cold storage facilities with a capacity of 35.0 million tons. The addition in capacity to the cold store and warehousing would also trigger the PEB market in India.
With the onset and speedy progress of the Metro rail system in the next 10 years, the scope of PEB is immense. Increase in technical competence plays a crucial role, and many market participants have introduced high-grade steel conforming to ASTM Grade 50 steel (light weight and recyclable) without compromising on the product quality, which attracted many customers to pay high prices for quality jobs.
The heightened emphasis on green building construction is also poised to push market expansion. For instance, to increase energy-efficiency, many PEB manufacturers have developed high efficiency windows and insulation for roofs, walls, ceilings & floors. The use of sky lights and solar panels on rooftops will meet daylight and captive power requirements, while, at the same time, reducing emissions and gaining carbon credits under clean development mechanism (CDM).
Many leading international and domestic market participants are increasingly scouting for opportunities by adopting multiple business strategies such as venturing into engineering design, project contracting, manufacturing heavy structural steel buildings, and focusing on vertical integration whereas, merger & acquisition strategy will support them to grow inorganically and enable them to broaden their geographic reach and product portfolios.
Analysis of the Indian Pre-engineered Buildings Market is part of the Building Management Technologies Growth Partnership Service program. Frost & Sullivan's related research services include: Select HVAC Products Market in India, Integrated Building Management Systems Market in India, Indian Fire & Safety Products Market and, Indian Facility Management Services (FMS) Market. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
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Analysis of the Indian Pre-engineered Buildings Market / P6B9-19
Nimisha Iyer, Corporate Communications South Asia, Middle East & North Africa
M: +91 98200 50519 / P: +91 22 6607 2004 - E: niyer[.]frost.com.