Precast concrete market analysis
The relevance of research
Reinforced concrete products are one of the most popular and sought-after categories in the modern construction market, both in the residential and industrial sectors. They are used in the construction of foundations, flights of stairs, elements of the roadway and heating mains, wells, power line supports, utilities and other objects.
Purpose of the study
Analysis of the state of the concrete goods market, assessment of the market size, analysis of competitors, as well as identification of factors affecting the market of concrete goods
Content
Part 1. Overview of the Indian precast concrete market
1.1. Main characteristics of the market
1.2. Dynamics of the concrete goods market volume 2015-2020 (Jan.-Oct.). Potential market capacity
1.3. Assessment of factors affecting the market
1.4. Precast concrete market life cycle stage
1.5. Competition from substitute products
Part 2. Competitive analysis in the precast concrete market
2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players
Part 3. Precast concrete production analysis
3.1. Volume and dynamics of domestic precast concrete production
3.2. Export share in precast concrete production
3.3. Segmentation of precast concrete production by regions
3.3.1. Production by Union Territories
3.3.2. Production by states of India
Part 4. Analysis of foreign trade deliveries of reinforced concrete products
4.1. Volume and dynamics of imports of concrete products
4.2. Import structure
4.3. Volume and dynamics of export of concrete products
4.4. Export structure
Part 5. Precast concrete consumption analysis
5.1. Dynamics of Concrete Consumption Consumption
5.2. Analysis of the results of tenders for the purchase
Part 6. Price Analysis
6.1. Average producer prices by union territories
6.2. Average consumer prices by states in India
Part 7. Assessment of factors of investment attractiveness of the market
Part 8. Precast concrete market development forecast up to 2024
Part 9. Recommendations and conclusions
Research excerpt
Part 1. Overview of the Indian precast concrete market
1.1. Main characteristics of the market
Reinforced concrete products are construction products made by pouring concrete into reusable molds, which are transported to installation sites or poured directly at the construction site. Precast concrete products come in many shapes and sizes, and their strength and resistance to stretching, bending and fire is provided by steel reinforcement.
Reinforced concrete products are one of the most popular and sought-after categories in the modern construction market, both in the residential and industrial sectors. They are used in the construction of foundations, flights of stairs, elements of the roadway and heating mains, wells, power line supports, utilities and other objects.
In the modern classification, reinforced concrete products are represented by two large categories: prefabricated and precast-monolithic structures. The first are manufactured in the factory, and then delivered for installation on site. The latter are produced directly at the place of use using formwork.
In addition, there are several basic products that are most in demand by the construction industry. These include:
- floor slabs (including hollow ones);
- runs;
- bar lintels;
- foundation blocks;
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1.2. Dynamics of the concrete goods market volume 2015-2020 (Jan.-Oct.). Potential market capacity
Consider the dynamics of the market volume of reinforced concrete products in India in physical terms for the period from 2015 to the available period of 2020 (January-October).
Diagram 2. Dynamics of the concrete goods market volume, 2015 - 2020 (January-October), million cubic meters m
The volume of the concrete goods market in India has a negative trend - for the entire period under review, the indicator was decreasing, with the exception of a slight increase in 2019 by …% compared to the previous period. The maximum drop in the market was recorded in 2015 by …% compared to 2014. For 10 months of 2020, the market volume amounted to … million cubic meters. m, which is …% lower than the figure for the same period last year.
First of all, this is due to instability in the construction sector of the economy, since the concrete goods market is closely related to the development of the construction industry and depends on the pace of industrial and residential construction.
As for the potential market capacity in the medium term, it depends on the dynamics of the B2B segment, that is, on the development of consumer sectors - construction companies. At present, the market is at the stage of decline, given the instability of construction organizations, the potential capacity is estimated at no more than +…% of the existing volume or … million cubic meters. m.
Diagram 3. Revenue (net) from the sale of reinforced concrete products in the union territories for 2015 - 2019, %
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Due to the fact that the volumes of imports and exports of concrete products are less than …% of domestic production, the calculation of the distribution of revenue across the Union Territories was made by GidMarket on the basis of data on the production of concrete products in the Union Territories.
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The distribution and dynamics of the shares of federal districts in terms of sales proceeds can be explained by several factors: the concentration of manufacturing enterprises and consumers, the size and income of the population, the level of solvent demand, etc.
1.3. Assessment of factors affecting the market
Let's consider the main factors influencing the market and, accordingly, the demand in the concrete goods market: economic, social, political and technological factors.
Economic forces
- Dynamics of GDP
Gross domestic product (GDP) is a macroeconomic indicator that reflects the market value of all final goods and services produced per year in all sectors of the economy in India for consumption, export and accumulation, regardless of the nationality of the factors of production used.
Gross domestic product is the main indicator on the basis of which the level and pace of economic development are determined.
Chart 4 shows India's GDP growth rate from 2012 to 2020 at comparable prices (at 2016 prices).
Diagram 4. Dynamics of India's GDP, 2012-2019, Q1-2 2020, % to the previous year
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According to Rosstat data for the period 2012-2014, there is a positive GDP growth rate, while the indicator gradually decreased, and in 2015 it was less than zero. In 2015, which was the peak of the crisis in the country, the decline in GDP amounted to …% compared to the previous year in 2014, and since the dynamics of GDP is directly proportional to the well-being of citizens, this indicates a drop in family incomes, a reduction in demand, and an increase in prices. It also led to a decline in production and employment. In 2016, GDP stagnated, at the end of 2017 this indicator shows a positive trend, namely, an increase of …% compared to the previous year.
In 2019, India's GDP increased by …%. The growth rate of the Indian economy slowed down compared to 2018, when the value of the indicator reached its maximum since 2015 (…%). The main factors that contributed to the reduction in GDP growth rates in 2019 include the deterioration of the global economy and the slowdown in world trade due to the conflict between the United States and China.
...
Thus, experts disagree on the real dynamics of India's GDP in 2020: a decline in the range of …%…% is predicted. In 2021-2023, the economy is expected to recover at a slow pace – by …%.
In this regard, the prospects for the concrete products market in India also depend on the scenarios for the development of several related markets, including the cement market. Consider the dynamics of consumer prices for cement in India.
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During the period under review, there is an annual increase in prices for cement in India, the largest increase was recorded in 2016 and 2018 – by …% and …%, respectively. For the period from January to October 2020, the price increase amounted to …%. This factor has a negative impact on the concrete goods market under consideration.
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Let's present the results of the analysis of factors influencing the market in the form of a STEP-analysis table.
Table 3. STEP-analysis of factors influencing the precast concrete market
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Thus, at the moment, the Indian concrete goods market is generally negatively affected by environmental factors of medium strength.
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A positive impact on the market is exerted by: state programs for the development of construction in India, voluntary certification for certain types of products, the development of new technologies in the industry, and an increase in the level of urbanization.
1.4. Precast concrete market life cycle stage
The Indian concrete goods market is currently at the fourth stage of the product life cycle - the stage of decline, for the period from 2015 to 2020 (January-October), the market volume is on average reduced by …%. This is primarily due to instability in the construction industry of the economy.
...
Consider the opinions of experts on the reasons for the fall of the market and further options for its development.
As market participants explain, the losses are due to two factors: a surplus of capacity and the dictates of developers who actively brought down prices in a falling market. Vitaliy Kalashnik, marketer at JSC Gatchinsky SSK, believes that “the concrete goods market has become a buyer's market, with low prices and unstable workload of enterprises. In addition, the panel at prices from above tightens the monolith, which is made from the same materials. With the ready-mixed concrete market even more overcapacity than the precast concrete market, buyers often not only abuse choice, but make it a permanent policy.”
The Development Director of Ladoga Construction Trust LLC believes that “losses may be associated with low margins in the manufacturing business. Which in turn leads to savings on management and depreciation of fixed assets. The level of management quality determines the order in which companies exit the market, and savings on repairs and depreciation lead to a drop in product quality.”
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Yuri Aleksandrov, Deputy Director of the Construction Management Department of the AAG Construction and Investment Holding, named two more reasons for the deterioration in the situation in the industry, he notes that “sales and revenues are falling (up to 40%), the price of products is not growing due to competition and low solvency , the cost falls. At the same time, the possibilities of financial, production and logistics optimization have been exhausted.”
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1.5. Competition from substitute products
Substitute products for concrete products are very scarce in the Indian market. In a number of cases, there is a displacement of products by substitutes for products of the chemical sector: reinforced concrete pipes are replaced with plastic ones, and profiled sheets are installed instead of reinforced concrete fences. The facts of using bored piles instead of driven piles are statistically noted. However, there are no significant substitutes in the main segment of the construction of residential and non-residential stock. In addition, due to the unification of reinforced concrete products, most construction projects do not provide for their replacement, since this will lead to an increase in the cost of objects - both at the development stage and during actual execution.
The impact of competition from substitute products is assessed as insignificant. In the medium term, they will not have a significant impact on the market, however, with the development of scientific developments and the invention of new types of products, it is possible to partially replace reinforced concrete products with a new product, or improved types of concrete: hemp concrete, wood concrete, ash concrete, reinforced concrete products reinforced with polymer composite materials, etc.
Part 2. Competitive analysis in the precast concrete market
2.1. Major players in the market
The Indian market of reinforced concrete products is dominated by domestic manufacturers, whose share exceeds …%. The precast concrete market in India is characterized by high saturation (the number of players exceeds 1000). Among other things, the crisis of 2015 had an extremely negative impact on the construction industry, and, accordingly, on the demand for building materials. The negative trend continues to the present.
There are no significant players at the federal level in the market. This is due to the unprofitability of transporting concrete products to distant regions, both because of the high cost of transportation, and because of government restrictions on the conditions of transportation. Basically, enterprises sell products locally, within their region or in neighboring states of India.
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2.2. Market shares of the largest competitors
Estimation of the market shares occupied by Indian manufacturers was made by GidMarket based on the revenue of manufacturing companies, taking into account the adjustment by line of business, data on market volume in value terms.
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2.3. Profiles of major players
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DSK-Production LLC
""First DSK"" has been operating in the Indian construction market since 1961. On the basis of existing production facilities, the projects of the First DSK are focused on the construction of standard and comfort class residential buildings using the most modern technologies.
Main activities:
- Construction of apartment buildings on individual projects that meet the requirements of the Renovation program, government and commercial customers.
- Development of projects for all stages of documentation, both for the houses of the ""First DSK"", and for the general planning and organization of infrastructure.
- Manufacture of reinforced concrete structures of any configuration.
According to the company, since 1961, 57 million square meters have been built. m of housing, 1000 reinforced concrete structures per day. The company employs 6,5 thousand employees.
Mostozhelezobetonkonstruktsiya JSC
JSC Mostozhelezobetonkonstruktsiya (JSC MZHBK) is a branch of JSC Dmitrov Plant MZHBK. The plant was founded in 1952. The company supplies bridge structures to Siberia, the Urals, and the Volga region. Among the large-scale construction projects using the plant’s structures: BAM, bridges across the Volga, Klyazma, Voronezh rivers, an overpass on Samotechnaya Square, the Nagatinsky complex, a three-level interchange at the Savelovsky railway station in the city, the Volokolamsk three-level overpass of the transport ring of the capital to the business center ""-City"" and etc.
Part 3. Precast concrete production analysis
3.1. Volume and dynamics of domestic precast concrete production
Let's consider the dynamics of precast concrete production volumes in India.
Diagram 14. Dynamics of precast concrete production volumes in India for 2015-2020 (January-October), million cubic meters m
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For the period 2015-2018. there is a significant decrease in the production of reinforced concrete products in India, in 2018 the drop in the indicator amounted to …% compared to 2015. Only in 2019, there is a slight positive trend – plus …% compared to 2018. However, following the results of 10 months of 2020, the indicator again shows a negative trend - …% compared to the same period in 2019.
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Consider the structure of precast concrete production in India by type of product.
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In general, it can be noted that from year to year the market structure in India remains fairly stable, however, some shifts are present every year, which is explained by the dependence of the industry on the construction sector of the Indian economy, which forms the demand for certain types of concrete products.
Diagram 16. Dynamics of the total revenue of the largest manufacturers (TOP-5) of reinforced concrete products in India, 2015-2019
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With the exception of a decrease in 2016, the dynamics of the total revenue of the leaders in reinforced concrete products is linear. At the end of 2019, the indicator amounted to … billion Rs., which is …% higher than the value of 2018 and …% higher than the value of 2015. The dynamics of the revenue volume of the top five market leaders differs from the growth rates of precast concrete production, as companies, as a rule, have several areas of activity, so the decline in the volume of reinforced concrete products is compensated by a different range of the enterprise.
3.2. Export share in precast concrete production
Diagram 17. Share of exports in production for 2015–2020 (Jan.-Oct.), %
Diagrams
Diagram 1. The ratio of imported and domestic products in the concrete goods market, in 2014-2020 (January-October) in physical terms, %
Diagram 2. Dynamics of the concrete goods market volume, 2015 – 2020 (January-October), million cubic meters m
Diagram 3. Revenue (net) from the sale of concrete products in the union territories for 2015 - 2019, %
Diagram 4. Dynamics of India's GDP, 2012-2019, Q1-Q2 2020, % to the previous year
Diagram 5. Dynamics of the consumer price index for packed cement, 2014-2020 (Jan-Oct), %
Diagram 6. Population dynamics in India, as of January 1, 2012-2020, million people, %
Diagram 7. Dynamics of real incomes of the population of India, 2012-2019, % to the previous period
Diagram 8. Dynamics of the employed population in the category ""Workers employed in construction and related occupations (excluding electricians)"", 2012-2019 million people
Diagram 9. Dynamics of commissioning of residential and non-residential buildings in India, 2010-2019, thousand buildings
Diagram 10. Dynamics of the volume of mortgage lending, 2019-2020 (January-October), billion Rs.
Diagram 11. Dynamics of the weighted average rate on residential mortgage lending, 2019-2020 (Jan.-Oct.), %
Diagram 12. Precast concrete market life cycle stage
Diagram 13. Shares of the largest competitors in the precast concrete market in 2019, %
Diagram 14. Dynamics of precast concrete production volumes in India for 2015-2020 (January-October), million cubic meters m
Diagram 15. Precast concrete production structure in India by types of products in 2014 and 2019, %
Diagram 16. Dynamics of the total revenue of the largest manufacturers (TOP-5) of reinforced concrete products in India, 2015-2019
Diagram 17. Share of exports in production in 2015–2020 (Jan.-Oct.), %
Diagram 18. Precast concrete production structure by states of India in 2019, %
Diagram 19. Volume and dynamics of reinforced concrete imports in physical terms in 2015-2020 (January-October), thousand cubic meters m
Diagram 20. The volume and dynamics of imports of reinforced concrete products in monetary terms in 2015-2020 (January-October), thousand dollars
Diagram 21. Concrete concrete export dynamics in physical terms in 2015-2020 (January-October), thousand cubic meters m
Diagram 22. Concrete concrete export dynamics in monetary terms in 2015-2020 (January-October), thousand dollars
Diagram 23. The balance of exports and imports in the concrete goods market in 2014-2019, thousand cubic meters m
Diagram 24. Structure of exports by countries in 2019 in physical terms, %
Diagram 25. Concrete concrete consumption dynamics in monetary terms, 2015 - 2019, billion Rs.
Diagram 26. Procurement structure by types of reinforced concrete products in 2019, %
Diagram 27. Factors limiting the production activities of construction organizations (based on a sample survey), Q2019 2020- , %
Diagram 28. Forecast of investments in buildings (residential and non-residential) and structures, 2020-2024, trillion Rs.
Diagram 29. Precast concrete market volume forecast in 2020 - 2024, million cubic meters m
Tables
Table 1. Forecasts from various sources for real GDP in India in 2020-2023. (base scenario), %
Table 2. Urban and rural population in India in 2014-2019, million people, %
Table 3. STEP-analysis of factors affecting the precast concrete market
Table 4. The main companies participating in the precast concrete market in 2019
Table 5. Profiles of companies participating in the precast concrete market in 2019
Table 6. Dynamics of precast concrete production in India by union territories in 2015-2020 (January-October), thousand cubic meters
Table 7. Structure of reinforced concrete imports by importing countries in 2019 in physical terms, units rev.
Table 8. Contracts for tenders for the purchase of reinforced concrete products, concluded from 01.01.20 to 30.11.20. worth more than 10 million Rs.
Table 9. Average producer prices in the precast concrete market in the Union Territories in 2015-2020 (Jan.-Oct.), Rs./cub. m
Table 10. Average consumer prices in the precast concrete market by states of India in 2018-2019, Rs./cu. m
Table 11. Assessment of factors of investment attractiveness of the concrete goods market
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