Mumbai-based Godrej Construction plans to launch about 1 million square feet (msf) in mixed development, with residential and office spaces, with a revenue potential of Rs 1,300-1,500 crore within one year in Mumbai.
The company also plans to develop 2 msf within two years, in Mumbai itself, which is in the process of obtaining approvals, Anup Mathew, Senior Vice President and Business Head, Godrej Construction, told Moneycontrol on May 18.
The 1 msf development will take place in Mumbai and will comprise 365 apartments spread across 2.5 acres. The 2/3/4 BHK apartments will be priced between Rs 3 crore and Rs 10 crore.
"Though it will be a mixed development, more than 50 percent will be in the residential segment. Additionally, we will launch a two-acre land parcel, which is currently in the planning stage," Mathew said.
Godrej Construction is one of the subsidiaries of Godrej and Boyce. "We develop projects on our own, and, often, we collaborate with our partner, Godrej Properties, which looks after sales," he added.
Manufacturing units
Godrej Construction has several verticals. While one is into construction, another leases out spaces for commercial purposes. The manufacturing units make raw materials, like concrete blocks, pavers, box culverts (used for public infrastructure projects) etc, for the real-estate sector.
Mathew said, to date, the company has leased about 3 msf of office spaces. "We are in the process of leasing about 1.5 lakh sq ft by the end of this year in Mumbai and the conversation with shareholders is ongoing."
Currently, the company has manufacturing units across 10 industry operations in Guwahati, Bhagwanpur, Dahej, Goa, Mumbai, Pune, and Chennai.
"Today, the manufacturing sector is challenging, owing to the transportation involved. Thus we have set up centres in strategic locations, like the port cities of Mumbai and Chennai," Mathew added.
For southern India, the company has manufacturing units in Chennai that makes storage solutions like heavy-duty racking systems, which are used in the e-commerce industry. These products are utilised in India and exported to Singapore and the Middle East.
By combining the real-estate arm and the material construction vertical, the company earns revenue of upwards of Rs 1,000 crore every year, Mathew said.
We are looking forward to expanding more manufacturing units, especially in Dahej, where we have a 100-acre land parcel. “We have developed about 50 acres here. We are looking forward to developing the remaining 50 acres now," he added.
Challenges in the construction sector
Mathew said that, post-COVID, construction cost in the real-estate sector has increased manifold, coupled with domestic inflation and global challenges like the Ukraine-Russian war.
"Over the last year, construction cost has increased by at least 4-5 percent. For some specific product categories, like cement or concrete and finishing items, the percentage can be even more," Mathew added.
However, he said the company factors such inflation rates into the costs every year. Costs often depend on several fluctuating factors like monsoon or the mismatch between demand and supply of inventories.
Mathew believes that a push for recycled construction raw materials, like concrete bricks, blocks made out of recycled construction and demolition waste can reduce India’s dependency on foreign imports and even reduce costs.
However, challenges like GST, slapped on products such as recycled concrete blocks, often increase costs and prevent developers or contractors from using the sustainable options available.
"Government policies change from time to time. We have to encourage a circular economy by allowing tax incentives," Mathew said.
More investments in a well-connected recycling plant will provide more alternatives for the manufacture of raw materials while reducing dependence on imports, he added.
Currently, the company has invested about Rs 30 crore to set up a recycling plant in Mumbai that can recycle 30,000 metric tonnes (MT) of construction and demolition waste (C&D waste) in the city.
Additionally, the company is setting up C&D recycling facilities in Pune, Mangalore and Kerala.
3D concrete printing
The company has actively shown interest in 3D concrete printing technologies for construction purposes.
Contrary to traditional construction methods, 3D printing uses a robotic arm to create layers using a special concrete mixture fed into the system. The mixture has special adhesives for quick drying and other functions.
"We have developed a concrete mix with 30 percent recycled concrete. We have also achieved a prototype for 50 percent recycled concrete. Our latest trials have confirmed that 100 percent recycled concrete for the mixture can be achieved, one of the first globally," Mathew said.
Godrej Construction is actively involved in talks with private and government bodies to provide a solution with its made-in-India 3D printing technology, including software, he said.
"Today, we can demolish a building and use the debris to 3D-print another structure, though with technological challenges we can only do low-rise structures," he added.
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