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Newcomers yet make mark in pipe industry

Robust growth in pipe industry witnessed in last few years have attracted many newcomers into the industry – some of them were already in building materials segment like HSIL and HIL while some were totally new to the sector like Skipper. However, most of them are yet to make their presence felt in the industry.

Our survey reveal that Skipper has withdrawn from North and West while HSIL and HIL haven’t made any dent on markets so far. While existing players like Supreme, Astral and Ashirwad have large capacities and widespread network, most of the newcomers are just testing the waters by setting up smaller capacity units. Existing players have already invested huge sum to create brand awareness which is difficult to breach, at least in the short term.

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.

However, in the short term demand is affected by continued poor growth in real estate sector. Introduction of RERA has impacted growth real estate sector. But that is only in the short term, believe the pipe manufacturers. In the long run, they believe RERA will benefit the industry. RERA will ensure that only realtors with long term interest will remain in the industry and discourage the fly-by-night operators. Long term players will always have quality as the foremost factor in their business which in turn force them to go for quality branded building products including plumbing pipes.

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