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Construction chemicals industry should see strong growth in 2015: Giles Everitt

In this interview, Giles Everitt, MD, Chryso India, explains the changing dynamics of the construction industry and its impact on the construction chemicals industry

ImageRakesh Rao B2B Connect | Mumbai
Construction chemicals industry should see strong growth in 2015: Giles Everitt

Giles Everitt, MD, Chryso India

Chryso, a wholly owned company of private equity firm LBO France, is one of the leading global players in construction chemicals industry. Represented in the country through Chryso India (formerly known as Structural Waterproofing Company), the company offers a wide range of proven and time tested products to the construction industry.
 
Responsible for the expansion of business in India, Giles Everitt, managing director of Chryso India, is optimistic about the return of high-growth rate in the second half of 2015. In this interview with Rakesh Rao, Giles Everitt throws light on the changing dynamics of the construction chemicals industry and growth plans for Chryso India.
 
When you joined in 2013, economic scenario was uncertain in India. How has been your experience during the period? Are you seeing situation changing on the ground now?
When I was presented an opportunity to lead the Indian operation in 2013, I was delighted. The reason was very simple, India - with its cement consumption of about 250 mt per annum compared to UK’s 11 mt per annum - offers a huge opportunity for companies like Chryso which provide construction chemicals to the industry.
 
However, when I arrived in India, the market was going through a rough weather with consumption going down and a general sentiment of policy paralysis stifling the country’s growth. This resulted in many existing infrastructure projects being stopped or slowed down and fluidity in the market dried up. This had a catastrophic effect on the construction industry. These put huge demand on the company’s cash projections.
 
There was sluggishness in the growth. Though we were growing, it was nowhere near to what we were anticipating. Depreciating rupee against the dollar (during that period) added to the woes of the company.

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The industry so used to high-growth rate was all of a sudden faced with cost pressure and demand constrain. It was a difficult period. We managed our cost base to accommodate the stress on our margins, and we continued to do that in 2014. Now, we have a new government and the Modi government has started putting in place the road map for the future which augurs well for the construction industry.
 
Let’s hope that we will be able to see direct foreign investment coming into play, fast implementation & execution of projects, etc. If infrastructure starts to step up, then you will see real estate market also gaining the momentum.
 
We are seeing an increase in contract tenders coming into the markets. One can expect to see a slow start in demand in 2015. Cement industry is anticipating that the demand in the first half of 2015 is likely to exceed the second half of 2014. We will see a robust growth in the second half of 2015, and we are hopeful of having a strong fourth quarter.
 
How has been the performance of the construction chemicals industry?
If cement industry grows at 8% per annum (CAGR), then construction chemicals market should grow, at least, at that rate. Growth potential for the industry is very high since penetration of construction chemicals in the cement industry in India is still very low. Things could change as the demand for mechanised concrete is growing at a high rate with rapid urbanisation and need for on-time completion of projects. Increase in requirements of mechanised concrete means more amount of construction chemicals will be consumed in a project.
 
Construction chemicals cost compared to the total cost of construction projects is negligible, but value creation of these chemicals are significant in terms of reduction in raw material cost, speed of execution, and creation of high standard concrete.
 
Kindly share with us an overview of Chryso India’s businesses?
Chryso is recognised as an industry specialist in the construction chemicals market and has presence in over 30 countries. We specialise in admixtures and construction systems, and is renowned for its strong innovation capability. In fact, 40% of our sales turnover comes from products that are less than 5 years old. The company provides its customers with admixtures and additives for concrete, cement, and gypsum and also offers plasticisers, hardening accelerators, chromium reducing agents, and super-plasticisers.  

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Chryso entered into India by acquiring the Structural Waterproofing Company (SWC) in 2007. Chryso India has four manufacturing units - Kolkata (West Bengal), Alwar (Rajasthan), Vapi (Gujarat) & Chennai (Tamil Nadu) - producing for its three business units – concrete admixture, construction system and cement grinding aid. The company also has an R&D centre in Navi Mumbai to ensure efficient deliveries and quick response to its customers.
 
While concrete admixture is the core strength of Chryso globally and in India, we continue to see growth across all three business units.
 
What are your expansion plans? Are you looking for any acquisitions?
We are very optimistic about India, and we expect strong growth in the country. We have been upgrading our four production facilities across India to enhance our capability. We produce concrete admixtures, construction systems and cement grinding aids to meet the requirements of today’s demanding construction market.
 
If there is an opportunity of acquisition, which fits our business plans and helps us accelerate, then we will definitely look at it.  
 
Infrastructure, real estate and power sectors offer huge growth opportunities for Chryso in India.
 
But all these sectors are under tremendous stress. Are you seeing any change in this?
Growth should be stronger in the second half of this year. Though it will be not be a steep growth, I hope that it will be a sustainable growth.
 
What are your expectation from budget?
Budget should put in place a smooth roadmap for infrastructure. It should leave more money in the hands of people so that they are encouraged to invest in real estate. We have a degree of confidence in the Modi Government to deliver.  
 
What is your outlook for the industry and Chryso India?
With the rise in demand for mechanised concrete due to urbanisation and big infrastructure projects, the market for construction chemicals is expected to witness a robust growth. The entry of global players in the construction business will also help the construction chemicals industry to grow.
 
We are hopeful to achieve the steep sales target that we have set for 2015. From 2016, we see a very strong growth expectation.

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First Published: Feb 26 2015 | 3:36 PM IST

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