Ready mix concrete biz becoming attractive

Primary lure

The primary factors making RMC more attractive is that with large construction projects, quality and time are crucial. Though RMC would be 15 per cent costlier as compared to on-site mix of concrete, RMC offers significant benefits in consistent quality, which cannot be matched by manual labour in large projects.

Using RMC, projects can be completed 3-4 times faster as compared with on-site mixing of concrete. Builders can cover about 15 cu.m. an hour using RMC against just 3-4 cu. M. with on-site mix.

Land bottleneck

A major bottleneck to investment is the land cost, say industry experts. The business is essentially centred near large cities where there is demand and the RMC plants have to come up in locations close to construction points.

Investors are getting around land cost hurdles by opting for renting or leasing. Also, the demand is spreading from the urban centres to the smaller towns, which makes it more viable. For instance, in Tamil Nadu, apart from Chennai, more RMC players are looking at industrial towns like Coimbatore and Tiruppur where construction is booming. Similarly, the Delhi-NCR market is expanding to Chandigarh and Lucknow, they say.

Some issues that need to be addressed are the skew in taxation — a contractor working for a developer cannot avail of a VAT set off for inputs, which adds 12.5 per cent to the cost.

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