Waterproofing to become more organised -min
Since more than 50% of the market of waterproofing is in the hands of unorganised sector, it is believed that waterproofing market would see lot of consolidation in the coming months. With the introduction of e-way bill system, a level playing field has been created between organised and unorganised market segments and the price gap between the two has narrowed down considerably. As a result leading brands expect lot of demand shift taking place from unorganised market to towards branded compounds
Indian construction chemical industry, of which waterproofing is a part, is still in a nascent stage, but is attracting lots of attention with an increasing number of players foraying into the field. The construction chemicals industry which was of the size of around Rs 1,400 crore in 2007 has shown a robust growth to reach Rs 6,200 crore in 2018. Of this, the size of waterproofing market is around Rs 900 crore.
There are various types of waterproofing chemicals which cater to various end use applications with products based on Bitumen, PU and polymers like SBR & Acrylic. However, people are becoming environmentally conscious and therefore, are moving away from bituminous compounds due to their lower performance and non- eco-friendly nature. End products take various forms like liquid, solid, slurry and two-component coating forms.
Waterproofing compounds are usually used to stop water leakage and seepages. These compounds or membranes can be extremely effective when applied on the exterior of a foundation system. There are various methods of applying the waterproofing compounds and is usually done by implant treatments i.e. either dipping or spraying or by low-pressure spraying on the surface.
Waterproofing compounds can be added either during the construction or post construction. During the construction, it is added as integral waterproofer, for waterproofing of concrete and post construction it is added as a preventive and maintenance waterproofing ingredients.
Pidilite Industries is the leading manufacturer of waterproofing compounds in India. The company’s ‘Dr. Fixit’ is a leading waterproofing brand in the country. Dr. Fixit offers comprehensive system solutions for waterproofing a new home or repairing an existing one.
However, over the years many companies have entered the field of waterproofing. Noted among them is the leading paints company, Asian Paints. Recently, Berger Paints too has announced its plans to enter the waterproofing business. These paint manufacturers have already established wide distribution network and also have established brand names in the paint industry which they are aiming to capitalise by expanding the product portfolio. For example, Asian Paints has a network of nearly 50,000 distributors and dealers while Berger Paints has a network of around 18,000 dealers and distributors.
With the entry of new players competition in the waterproofing market is also hotting up. New players are resorting to innovative techniques to capture the market. For example, Asian Paints last year introduced warranty on key waterproofing products, which was a key differentiator in the waterproofing market. Damp Block 2K and Damp Sheath range was launched during last year which is expected to do very well in the coming years. For Projects, specialized products including a full range of repair products were launched, which has opened a significant market for the company to address.
Market for waterproofing can be classified into two categories, new constructions and retail market. Due to slowdown in real estate market, waterproofing compounds saw slower demand emerging from new constructions. However, retail business made up for the slowdown in new constructions. In waterproofing business, the main focus is to increase the awareness of the products as the consumption of these products is through retail channels and happens across India in bigger and smaller towns. Educating the contractors, applicators, homeowners, etc. is part of the marketing exercise adopted by leading brands.
As stated earlier, demand from large projects has remained muted. Even before the demonetisation, real estate sector was passing through slowdown and demonetisation only aggravated the situation. In 2017, RERA came into play which has delayed the recovery of the sector. Waterproofing business received another setback when the government introduced GST regime in the country due to which lot of destocking took place in June last year. Part of the business lost due to slowdown in real sector is made good by good growth in tier 2 & 3 cities and rural India.
Since more than 50% of the market of waterproofing is in the hands of unorganised sector, it is believed that waterproofing market would see lot of consolidation in the coming months. With the introduction of e-way bill system, a level playing field has been created between organised and unorganised market segments and the price gap between the two has narrowed down considerably. As a result, leading brands expect lot of demand shift taking place from unorganised market to towards branded compounds.
Further, adoption of international standards and increase in high rise buildings in Tier I cities will increase the usage of construction chemicals in general and waterproofing compounds in particular. As the consumer becomes more and more aware about the efficiency and effectiveness of waterproofing compounds available in the market, the focus will shift to price to performance ratio and not price alone as is presently the case.