HomeIndustry TrendsRetail waterproofing business growing fast

Retail waterproofing business growing fast

Despite the presence of some of the biggest brands, waterproofing business in India is highly unorganised and fragmented. In fact, in rural India, it is never considered as a specialised profession and one who owns a house should also know how to waterproof of his home and if he cannot, he should at least know to live with leakages without complaint! In other words, spending money on waterproofing is considered as wasteful expenditure.

It’s also true that many houses in the rural areas and also in cities are kutcha houses for which the industry has not yet developed a perfect waterproofing technology. But things are changing – kutcha houses are getting converted into pucca houses and invasion of internet has taught us how to live without leaking roofs. Having said that many houses in the rural areas and semi-urban areas still use conventional waterproofing techniques, though these techniques are dying a slow death due to non-availability of skilled labour and at the same time, availability of much cheaper and easy to use modern products and technologies.

Entry of new players

One of the recent trends in waterproofing business is the entry of paint making companies into the business. Paint manufacturers in India sell their decorative paints through a network of dealers spread all over the country and by adding new product line which caters to the same segment of customers as paints, they will be able to expand their business without adding new dealer network. Asian Paints started this trend by venturing into this line a few years ago. But in recent past the company is giving extra push to this business and according to the company, it has already claimed the second position in the industry and is aiming to become number one in few years down the line.

In January 2019, Birla Corporation Limited, the flagship company of the MP Birla Group, entered the business of wall putty and construction chemicals to supplement its premium Perfect Plus brand of cement. According to the company, this will also create opportunities for Birla Corporation to foster new partnerships with retailers of construction materials, such as hardware and paints.

Akzo Nobel, one of the leading paint manufacturers in India, in a bid to expand its portfolio has   launched products in the fast growing waterproofing category under the brand Aquatech. Akzo has already reached waterproofing revenues of Rs1,000 crore in India.

Berger Paints, another paint maker, has launched a waterproofing product, emulsion Easy Clean fresh and Home shield PU shield (water proofing with UV resistance properties). According to the company sources, many more launches are expected in the current financial year. According to the company, all the launches have delivered on expectations.

Slower formalisation of the industry

As state earlier, the waterproofing business in India is dominated by the unorganised sector. 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 after the introduction of GST. However, market share gain by the organised players is minimal till date and some experts point towards the provision of GST exemption limit of Rs 40 lakhs which help numerous players in the unorganised sector to carry on their business in a normal way. However, with the introduction of RERA, waterproofing business of the new construction may entirely shift to organised sector.

Stronger retail market

At present, waterproofing industry in India is experiencing divergent trend. While real estate business (new constructions), especially residential ones, is passing through a dull phase, retail segment on the contrary is seeing a robust growth. Take the case of Pidilite. Pidilite has subsidiary companies, Nina and Percept which are waterproofing services companies and undertake large waterproofing projects in the building segments like commercial buildings, residential buildings, factories, etc. According to the company, that segment of the business is seeing stress while retail business is doing very well. This speaks the health of the waterproofing business in India. The company and many other people in the industry feel that the current situation is unlikely to improve in the medium term.

However, the entry of many new players indicates that long term prospects of the industry undoubtedly positive. Conversion of Kutcha houses into pucca houses, provision of housing for all, 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.

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