Manufacturing companies in the country are increasingly using pre-engineered buildings (PEBs) — made from putting together readymade blocks — to quick-start operations at costs that could be 20-25 per cent lower than conventional concrete buildings.
These companies are driving demand in the Rs 5,000-crore PEB industry, which uses steel as a major component. If the housing sector also takes to PEBs, which offer time and cost advantages, the demand growth would be exponential, say industry officials.
“The current potential demand for PEB in India is 1.2 million tonnes (yearly), whereas the supply is around 0.35 mt only. If the housing sector also changes its mindset to accept this concept, the potential would be humongous,” said Ghanta Prasada Rao, executive director, Delta PEB Pvt Ltd. The company started its operations last year and had already completed 40 projects.
Currently, the demand for PEBs is driven largely by the growth in manufacturing, retail and the logistics sector. The real estate consultants feel there is a lot of scope for this industry to grow, as many multinational companies in auto, retail, information technology, logistics and others have opened their production base in India.
“A PEB building gets constructed at a much faster pace than conventional building and also there is lot of flexibility in terms of low maintenance requirement, easy dismantling and relocation, easy future expansion and modification, and these facets are driving the growth of the market,” said Santosh Kumar, CEO Operations, Jones Lang LeSalle Meghraj.
Companies in the PEB sector expect it to grow at 25-30 per cent yearly in the coming years. Everest Industries, which announced its foray into the sector last year, found good demand from the logistics and manufacturing sector. It clocked revenues of Rs 170 crore in the past 12 months.
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“PEB saves cost to the tune of 20 to 25 per cent. Moreover, one can easily dismantle and relocate PEBs, which gives the owner the a lot of flexibility,” said Utpal Ghosh, chief-sales & marketing, steel building solutions, Everest Industries.
Agrees Rao of Delta PEB: “The first advantage is that it takes less project completion time. Second, the material consumption is far less compared to concrete buildings. Moreover, the quality would be excellent, as it is factory-controlled. PEBs also have flexibility in design, aesthetics, dismantling ability and easy future expansion.”
Pennar Engineered Buildings Systems Ltd, which has recently tied up with the US-based NCI Group for technical know-how on PEBs, feels the industry has to come together and make people aware of the advantages.
“It is a big challenge to all of us in this PEB industry to try our best to educate the people about the advantages of steel building, especially pre-engineered buildings, compared to concrete buildings,” said P V Rao, President, Pennar Engineered Buildings Systems Ltd.
The increasing use of PEB, however, means the industry is also subject to the volatility in steel prices. “We are pushing for long-term rate contracts with our vendors to face the fluctuating price problem. Also, we are proposing a ‘price variance clause’ to our customers,” said Rao.