Plumbing pipes industry – CPVC pipes gaining ground

Plumbing pipes industry – CPVC pipes gaining ground

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During the period 2012-2017, Indian plastic piping industry has grown at a higher pace than GDP growth due to higher investments in end-use-sector such as irrigation and urban infrastructure. Interestingly, organised players grew at a much higher pace compared with the piping industry average growth which in turn has enabled them to increase their market share vis-a-vis unorganised sector.

Increase in the quality consciousness of consumers, emerging premium products in real estate, growyh in fittings segment, and chlorinated polyvinyl chloride (CPVC) niche applications are the main reasons for rapid growth of organised sector. Plastic pipes are made using various types of polymers. Unplasticised polyvinyl chloride (UPVC), CPVC, high density polyethylene (HDPE), and polypropylene (PPR) are the four main types of polymers. Among several variants of plastic pipes available in the market, the demand for UPVC and CPVC, in particular, is rising due to their affordability, high quality, and high durability.

In recent years, especially during last decade, there has been a massive shift from metal- to polymer-based pipes in case of plumbing and piping applications in the construction industry. Usage of plastic pipes has received a big boost with the development of specialised product, CPVC, for hot and cold water plumbing, firefighting, etc. As the production of CPVC pipes poses technological barriers to players in the unorganised sector, it has given an upper hand for the players in the organised sector in their race for gaining market share. Till the introduction of CPVC, UPVC was the dominant product in the piping industry with several unorganised players having installed significant manufacturing capacity.

Increased quality consciousness about the pipes in the real esttae sector in recent years too has contributed to the evolution of the piping industry. Also, consumers, especially those in tier-I and tier-II cities, are now a days demanding better quality pipes and newer plumbing systems for their homes and projects. Further, advancements in construction technology has also forced changes in the design and layout of drainage systems. The trends of vertical growth and premium architectural designs have also contributed to the evolution of premium drainage systems having low-noise properties.

In case of HDPE pipes quality had been an issue due to the large-scale failure of pipes made from scrap HDPE and sold to prestigious government projects as prime grade pipes in early 1980s. Immediate beneficiary of these incidents of poor quality is the PVC pipes whose demand surged ahead. Over the years, technological developments have helped to improve the quality and consequently regain the reputation of HDPE pipes who have found new application areas like drip and sprinkler irrigation, gas piping, large diameter sewerage pipes, etc.

Increased presence of unorganised players and also uneven playing field by way of lower and negligible tax rates paid by them, forced many players in the organised sector to shift their focus to areas which require technologically superior skills. Many organised players expanded their fittings capacity manufacturing of which required a higher precision, thereby constraining the unorganised players from entering this space. Many branded players have aggressively expanded their fittings capacity and come up with new products over the years to cater to the high demand in this segment.

Bureau of Indian Standards (BIS), formerly the Indian Standards Institution (ISI), has been issuing standards applicable to pipes from time to time. BIS introduced standards for PVC pipes for the first time in 1968 called IS 4985 standards covering PVC pipes from 16 to 315 mm. The standard has since undergone three revisions and the latest revision was done in 2000. The standard is designed greatly in line with the International Standards Organisation (ISO) 4422, keeping in view the requirements of the global market. Similarly, BIS has separate standards for HDPE pipes of different applications.

The Central Institute of Plastics Engineering & Technology (CIPET) is a third-party independent inspection agency that conducts inspections and certifies plastic piping systems based on BIS standards. The International Association of Plumbing and Mechanical Officials Plumbing Codes and Standards India Pvt Ltd, which was founded in 2007, also provides certification for plumbing piping systems.

Supreme Industries, Astral Poly, Prince Pipes and Finolex Industries are some of the major pipes manufacturers in India. Supreme Industries with a market share of 11% is a leading manufacturer of pipes in India followed by Finolex Industries with 9% market share.

In last couple of years, plumbing pipe manufacturing business has become favorite destination of several companies. While brands like Ashirvad and Astral and Supreme are strengthening their position in the market through expansion, new players like HIL are entering the market. And marginal players like Skipper have some ambitious growth plans too.

Mad rush to set up new capacities and expand the existing capacities are not without any reasons. According to a survey done by a research agency, current market size of plastic pipes is around Rs 8,500 crore which is expected to almost double to Rs 16,000 crore in next five years. Ambitious government programmes and growing middle class population with growing income are cited as some of the reasons for expected fast paced growth prospects of the industry.

Historically, growth of plastic piping indusry closely follows GDP growth trend as it mainly caters to agriculture and construction which together account for 25% of the GDP. However, plumbing piping industry is also dependent upon the health of the real estate sector. Recent government reform measures relating to real estate and taxation are likely to help the orderly development of the piping industry in the coming years. Also government programs like housing for all, smart city mission and Swachh Bharat Mission are expected to boost the demand for the plumbing products in the coming years.