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Construction : Viewpoint | October 2016 | Source : CW-India

Smooth Sailing

After the new government took over at the Centre, there is a perceivable momentum in industrial, infrastructure and warehousing projects, says PV RAO.

Infrastructure is the main priority for the Indian Government currently. The development of infrastructure is the main tool for achieving GDP growth targets today. Nearly all the infrastructure sectors present excellent opportunities for construction, with roads, highways, ports, airports, railways, and power standing out as bright spots, with huge sums of investment planned.

India´s economy is big and getting bigger. Liberal and supportive government policies, coupled with deliberate strategies to promote infrastructure, will translate into great opportunities for engineering and construction companies in India. Along with the construction industry, allied industries like cement and steel are also expecting a rise in demand.

With the increased emphasis on sustainable construction, pre-engineered buildings (PEBs) are being created with a high proportion of recycled content, making them lighter by about 30 per cent, compared to conventional steel buildings. They contain a higher degree of fire and dust-resistant material, and are maintenance free. The level of awareness about the benefits of new eco-friendly material in the construction industry is growing, and the industry is moving forward from traditional methods of construction to environmentally-friendly methods.

As a result, today the PEB system is the most preferred choice among architects, builders, developers and industrialists. Green buildings are being preferred in steel, in sectors such as industrial buildings, multi-storied steel commercial buildings, office buildings, retail stores, distribution centres, warehouses, airports, defence installations, etc, in view of reduction of environmental impact during the building´s life-cycle. The steel building concept itself is eco-friendly, considering factors like energy usage, efficient use of space, recyclability, conserving natural resources, occupant comfort and sanitary conditions.

Great potential
PEBS Pennar, a Hyderabad-based ISO 9001:2008 certified company, is augmenting the Indian PEB market competently in design, fabrication, supply and erection of steel buildings. Pennar adopts manufacturing methods that can efficiently satisfy client requirements, and abides by international standards. It has a manufacturing facility spread over 26 acre of plant area, with a capacity of 90,000 MT per annum, and has carried out many projects across India since the last seven years.

Pennar set up the first eco-friendly plant in the country which has received a ´Gold´ rating from the Indian Green Building Council (IGBC).

PEB technology has evolved over the past few years; the concept entered India in 2000, and the market has been growing consistently after 2003 at a rapid pace. Though there was sluggishness in the market during 2008 to 2010, it is now growing fast at 15-20 per cent per year. The current market size is around Rs 4,500 crore, which includes organised and unorganised players.

After the new government took over at the Centre, there is momentum in industrial, infrastructure and warehousing projects. The industry is looking at huge demand in the warehousing sector, in view of the rollout of the Goods and Services Tax (GST). Also, in view of tremendous growth in the e-commerce businesses, several big players like Amazon, Flipkart, Reliance Retail, Snapdeal, Safexpress, VRL Logistics, etc, would need large distribution centres. PEBS Pennar is constructing a 4 lakh sq ft distribution centre for Amazon at Hyderabad airport through GMR. The company has already constructed two similar size distribution centres for Reliance Retail at Pune and Tumkur.

The ´Make in India´ slogan by the new government will definitely boost industrial production in times to come. The decision to source defence equipment from the domestic market to a larger extent will significantly encourage industries in this segment. Also, the thrust on Smart Cities will have a positive impact on demand for steel structures. With the allocation of significant funds for the infrastructure segment in the recent Union budget, there will be a huge opportunity for steel structures and PEBs.

Currently, the supply is more than the demand. Market conditions are expected to improve shortly, in view of the positive environment created by the government. A lot of FDI's are expected to come into defence manufacturing and agro-based industries. If bank interest rates come down further, the manufacturing sector will take a big jump forward, and there will be more demand for PEBs. The government has to come forward to set up more SEZs, and should start pumping in more funds into the infrastructure sector.

With the industry being positive, and on the back of supportive policies, PEBS Pennar has worked for reputed companies such as MRF, Audi, UltraTech, L&T, My Home Industries, Bosch, Godrej, ACC, Honda, the Tata Group, Schindler, Schneider, IOT, Core Green, Dr Reddy´s, and more. Due to the quality of our products, we have bagged a number of repeat orders from our customers. Among other projects, we have built a 99-m clear span building for UltraTech, a 1-km-long PEB warehouse for ONGC Petro Additions, and two 4 lakh sq ft National Distribution Centres for Reliance Retail.

In addition to PEBs, we have added new product portfolios to cater to structural steel, solar module mounting structures, low-cost housing and communication towers. Also, we have entered into providing engineering services to PEB companies in the US. We have plans to start our second manufacturing unit in North India soon. Pennar is also trying to explore new opportunities in Africa and CIS countries.

About the author:
PV Rao, Managing Director, Pennar Engineered Building Systems, is a Civil Engineer from JNTU-Kakinada, with more than 35 years of experience in the construction industry.

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