22 March 2018

Table of Contents for Construction Chemicals

Construction Chemical

Triggering Chain Reactions


An integral part of the construction ecology is construction chemicals. However, this segment is yet to develop fully in order to fulfill its place in the modernisation wave currently sweeping India’s construction sector. This is basically because of the abysmally low awareness of its benefits, as a consequence of which India’s construction sector has low penetration of construction chemicals usage.


Although other niches like construction materials and equipment are modernising as part of the overall movement of modernisation of construction methods sweeping India’s construction sector, the construction chemicals segment, including waterproofing is yet to penetrate the Indian market. With fast track rollout of infrastructure mega projects including transport segments of rail, road, ports, airports, urban infra like metros, bridges and flyovers, power and T&D sectors, logistics infra etc., add up to a huge growth potential for India’s construction sector. The other sector majorly driving growth is the urban segment, where rapid urbanisation across Tier II and Tier III cities is generating huge demand for housing, especially demand drivers like affordable housing segment and other government initiatives to develop India’s urban centers. With a major rise in construction activity across all segments, there will be a concomitant rise in demand for construction chemicals.



Demand yet to crystallise


According to a recent report ‘Indian Specialty Chemicals Growth Catalysts,’ published by JM Financial Research, in Sept, 2017, “In construction chemicals, India spends around $1.5/m3 on concrete admixtures vs. $3/m3 and $4.5/m3, in China and the US, respectively. With increased focus on improving the quality of construction, per capita consumption of specialty chemicals in India could grow faster than the industry rate.” This observation, done as recently as in end-2017, underlines the fact that the Indian market for construction chemicals is characterised by extremely low penetration.


According to the table above, among end-user industries accounting for consumption of specialty chemicals in India, Real Estate ranks fourth accounting for only 11.20 per cent of specialty chemicals, the situation in construction sector as a whole is even worse, it ranks last and will account for a meager 5.65 per cent of total consumption by 2020.


The data above reveals a very low consumption of construction chemicals in India compared to the global average. China accounted for 42 per cent of the global construction chemicals consumption in 2014. This reveals a very low penetration of construction chemical usage in India. End user awareness is very low regarding new chemical techniques and modern construction aids. Most contractors don’t even realise that over all, construction chemicals’ costs 2 per cent-5 per cent and account for just a fraction of the overall project or raw materials costs, but their value in terms of imparting durability and building a sturdy structure is immense in terms of costs saved on repair and maintenance, in addition to increasing the overall lifespan of the structure.



Green Footprint


In keeping with the Green trend of eco-friendly construction chemicals, some companies offer innovative products. Lucid Colloids for example has developed guar based products for construction industry.


“We manufacture a wide range of guar gums and other hydrocolloids and their derivatives specifically designed for applications in paints and construction materials sector, our “Rheoluc” range of Hydroxypropyl Guar Gums (HPG) are useful as rheology modifiers, thickeners, water retention aids etc.


Demand for our products across all application sectors, both globally and domestically, is growing. Currently two sectors are targeted for rapid growth – construction materials and paints.


I have developed our Rheoluc range for paints and construction materials, which are import substitutes for Hydroxyethyl Cellulose (HEC).” Nikunj Dhuldhoya, President, Lucid Colloids.


“Going ahead, the construction chemical industry should focus on developing new processes and products with sustainability as the core principal. This requires development on a collaborative platform in which the academic, government and regulatory bodies, manufacturers and customer come together and promote and execute strategies for implementing judicious use of chemicals in the construction industry,” says Deepak Mehta, Vice Chairman & Managing Director, Deepak Nitrite Ltd.


According to a research paper ‘ Indian Construction Chemicals Industry –Status, Opportunities, Challenges and Strategies,’ published by BASF India Limited, the ‘Treatment ratio to Construction’ is only 0.5 per cent in India, compared to 2-3 times in China and 3-4 times in the USA. “This is because of lower mechanisation, site batched mortar production and limited awareness of how to achieve higher treatment ratios. However, with increasing adoption of modern construction methods and materials, the Treatment ratio in India has improved by approximately 25 per basis points over last 10-15 years,” says Upen Patel, Business Director, South Asia BASF India Limited, author of the report.


But the weakest link in the construction chemicals ecology is poor skills of applicator community due to their lack of basic knowledge of correct methods of applying high end, high tech chemicals. The practice of employing unskilled workers in construction activity is only aggravating the situation. Construction chemicals are sensitive products and their use requires basic technical expertise and training. Contractors are not adequately aware about use of right type and quality of construction chemicals for durable structures. Durability of materials has is not been studied extensively by manufacturers for specific applications under Indian conditions. Also, chemical protection and maintenance is not well understood by users and application tools and accessories need to be updated. According to McKinsey, adoption of use of construction chemicals is less than 25 per cent in India.


Right now a very low awareness of construction chemicals among India’s construction fraternity is the biggest inhibitor to adequate market penetration of these products.



Major Challenges


The biggest challenge in India right now is that is a highly price sensitive market and in order to remain competitive manufacturers have to keep their margins low because most contractors prefer low-cost chemicals to reduce their overall construction costs. High value products have limited demand and are mostly used only by premium construction houses. Contractors are still not fully aware of the benefits of various construction chemicals and hence tend to use low-cost substitutes. Decisions are taken based on immediate cost and not on overall benefits achieved from the usage of these materials. The problem is further compounded by the fragmented nature of the industry. Apart from a few multinational brands and some Indian companies in the organized sector rest of the market is accounted for by the unorganised sector comprising local small-scale manufacturers, who dominate regionally due to the regional nature of India’s construction market.


Due to low entry barriers, competition is high and several low value products are being sold by the unorganised sector in the Indian market. The top 7 players account for about 50 per cent of the market, the next 20 players have a 25 per cent market share and the remaining 25 per cent of the market is accounted by small and unorganised players.


Major players in the Indian market include market leaders, some of which are global players in their products. There are many other regional and smaller players as well. Approximately 300 companies are estimated to be operating in this segment. In the past there has been a considerable change in the market share of companies due to which medium-sized and regional manufacturers have gained considerable share of market.



Slipping on GST rollout


Recent rollout of the new GST regime has put the construction chemicals sector in disarray. The confusion arises due to ambiguities in their classifications as per the HSN code. Anomalous and mutually conflicting and contradicting definitions and classifications of different types of construction chemicals is confusing manufacturers of these chemicals. While the big players summarily pay the upper limit of the tax slab to avoid any future liabilities, it is the small and medium size manufacturers (who form a majority of the population in this sector) that are facing a negative impact of the GST, which is squeezing their profit margins rather than benefitting them.


“As far as I feel intention of government is always positive when they bring in a new set of rules. However, during intermediate time there are some discrepancies, some ambiguities, anomalies in classifications which we are not agreeing upon together as an industry. Main reason for that being HSN Classification has to go under two steps. One is the constituents of materials which used to formulate your own products and second is application based. In many or most cases, these two classifications are itself contradictory.


As far as benefit to industry or individual company is concerned, until now we have not been able to see any benefits because our customers are pretty large companies and they are asking us discounts saying now that GST is come your prices should reduce, pass on the benefits. But basically, this is not applicable to companies like us who have already registered in the old regime, the benefit will come to people who are not within this registration regime. They will get the benefits so they will be able to pass it on to the end consumer. One is the project market which we serve, other is the retail market,” comments Samir Surlaker, Managing Director, Assess Seal-N-Care, adding, “Construction chemical industry today, almost 70 per cent of revenue comes from end consumers. For them it may be a tremendous benefit so they can pass on the benefit and get real advantage to the end customer. As far as the project business is concerned I think still it doesn’t make much of a difference.”




Balancing Demand Equations


Giving an individual breakup of product verticals across the construction chemicals spectrum, the ‘India Construction Chemicals Market By Type (Concrete Admixtures, Waterproofing Chemicals, Flooring Chemicals, Repair and Rehabilitation Chemicals and Others), By Application and Competition Forecast and Opportunities, 2010 – 2020,’ published by TechSci Research, the construction chemicals market in India is projected to grow at a CAGR of over 15 per cent by 2020. In 2014, concrete admixtures accounted for highest share due to the increasing population of high rise buildings. Admixtures, adhesives and sealants are expected to contribute collectively 61.2 per cent share by 2020. The report anticipates a decline in growth of repair and rehabilitation segment from 12.7 per cent in 2014 to 11.9 per cent in 2020, indicating a lack of inspection and maintenance in India’s construction industry.


Future Market Insights (FMI)’s report titled, “Construction Chemical Market: India Industry Analysis and Opportunity Assessment 2014 – 2020,” says the Indian construction chemicals market will clock a CAGR of 17.2 per cent during 2014 to 2020. The market is projected to reach $ 1,890 million by 2020. Utilisation of construction chemicals has witnessed significant growth in India due to increasing infrastructure development activities in the infra, urban infra and real estate segments. According to the report, waterproofing segment will register the most robust demand. In value terms the report says the Indian market is estimated at $ 1,890 million by 2020. The new trend of ‘Going Green’ and Government regulations on construction of greenfield projects, or redevelopment projects, will drive the demand for construction chemicals. There is also growing preference for ready-mix concrete (RMC), which in turn is driving demand for construction chemicals in India. Other challenges faced are, volatility in raw material prices and lack of interest for implementation of quality standards by infrastructure developers.


Some major trends in India construction chemical market are increase in investment in R&D, entry of new players, adoption of sustainable products and technological advancements. Asian region is turning out to be focus point for most of the major construction chemicals companies for investment in R&D. Rising construction of new buildings and renovation activities across India is expected to boost the overall demand for construction chemicals in the near future. Most major players are ramping up capacities and expanding their product range.


As construction activity picks up in India’s real estate and infra sectors, it will trigger a chain reaction across the value chain, starting in the field from the end-user fraternity, culminating in robust demand for construction chemicals across product verticals. Hopefully the demand remains sustainable in the long run to foster growth of India’s very latent and yet-to-be-developed market for construction chemicals.




Global Potential


While a very low market penetration of construction chemicals in India reveals a huge potential demand which will now manifest concomitant to construction activity picking up across demand verticals, manufactures also have huge potential for exports. As rapidly mounting demand will prompt capacity addition in the organised sector, manufacturers can also ramp up to play in the global market, as done successfully by India’s construction equipment sector. A vibrant and competent manufacturing base already exists in the chemical industry. Global and Indian manufacturers just need to focus on meeting international quality standards to export.


According to Allied Market Research, infrastructure is the most attractive segment in global construction chemicals market. It would be the first preference for new entrants due to surging population and urbanization giving driving the need for sustainable infrastructure and environmental friendly products. The global infrastructure market was valued at $ 7,415 million in 2015 and is expected to grow at a CAGR of 7.7 per cent during 2016-2022. Residential is the second most attractive segment for new entrants, it was the highest revenue generating segment in 2015 valued at $12,361 million representing nearly half of the global market. Manufacturers ramping up production base in India can refer to the above diagram to put an effective strategy for their product portfolio.


Considering the nascent stage of the Indian market, several foreign and domestic players, including infrastructure developers, chemical manufacturers and institutional investors, are ramping up production by setting green field manufacturing facilities and expanding capacities of their existing manufacturing base to foray into the Indian market. To quote from ‘Winning in India: The Specialty Chemicals Opportunity,’ a paper by McKinsey on manufacturing opportunities in India, “One International chemical company has worked with an Indian tyre producer for the past two years to incorporate its specialty fiber into a new radial tire designed to cater to Indian car buyers’ demand; this initiative has already translated into tens of millions of dollars of new sales. Top-management teams at Western chemical companies are all too aware that emerging markets are on track to take an increasingly dominant share of global demand growth and anecdotes such as this only reinforce the idea that they should engage more with the Indian market. Many senior-management teams would do well to keep in mind that their global market positions would be in much better shape if 10 years ago, when China was only the fifth-largest chemical market, they had recognized the true scale of the opportunity in China. As some international companies are showing, the Indian market offers a chance to get it right this time.”


India’s chemical manufacturers and entrenched players in its construction chemicals segment have the capacity to build a world class construction chemicals manufacturing base in the country with an eye on the global market. This time around when the ‘chain reaction’ of demand for construction chemicals begins at the ground level, it won’t be surprising to find Indian construction chemicals joining ranks of other Indian industries who ‘Make in India and Sell Globally.’





  • BASF India Ltd
  • Cera-Chem
  • Chembond Chemicals Ltd
  • Choksey Chemicals
  • Chowgule Construction Chemicals
  • CHRYSO India
  • CICO Technologies Ltd
  • Cipy Polyurethanes
  • Dow Construction Chemicals
  • Fair Mate
  • Fosroc Chemicals India
  • Huntsman Advanced Materials (India)
  • Mapei Construction Products India
  • MC-Bauchemie (India)
  • Pidilite Industries Ltd
  • Sika India
  • STP Ltd




  • Strengths: Developed Chemicals manufacturing ecology, including R&D, to ramp up capacities and develop new products
  • Weakness: Low Market Penetration--- >25 per cent, Highly Fragmented Industry -- needs Consolidation (CCMA is doing Yeoman’s job), Abysmally Low Awareness, Lack of well defined Standards, Meager Market Share in India’s overall Specialty Chemicals output
  • Opportunities: Latent Demand-- Robust Drivers, Early Bird Advantage, Ramping Up Capacities
  • Threats: Ever present threat of price wars, cheap substandard products from unorganised sector, Large Scale dumping of Chinese imports



Anti-Dumping Duty on Chinese imports


To prevent large scale dumping, DGAD has slapped Anti-Dumping Duties on Chinese imports. India will likely impose anti- dumping duty of up to $ 397 per ton on a Chinese chemical used in construction and dyes industry, to safeguard domestic players from cheap imports of 'Sulphonated Naphthalene Formaldehyde' from China.


Commerce Ministry's investigation arm, Directorate General of Anti dumping and Allied Duties (DGAD), has concluded that the product has been exported to India from China below its normal value, resulting in large scale dumping in Indian construction chemicals market.


"The domestic industry has suffered material injury due to dumping of the product,” said DGAD in a notification issued last month, recommending a 5 year "imposition of definitive anti-dumping duty" to protect Indian industry, after an application for anti-dumping investigation was filed by Himadri Specialty Chemical. While DGAD recommends the duty, Finance Ministry imposes it.







A lack of stringent regulations and Standards is other major issue inhibiting market penetration of construction chemicals in India. The industry lacks in relevant consumer Standards for construction chemicals. Market participants are also frequently challenged by the absence of quality standards for manufacture and application of construction chemicals which leads to price wars. Currently the biggest challenge is regulating the unorganized sector.


Setting up a Quality Control Code and trained manpower to apply these fine chemicals effectively, are the major challenges facing the Indian market. The Government and regulatory bodies need to define set quality standards for the industry to prevent low quality, cheap construction chemicals entering the market. The CCMA (Construction Chemical Manufacturers Association) is helping the BIS and ISI to draft a Quality Code and enforce it in the Indian market. BIS has agreed that CCMA will be on key IS Code committees to take view point of expert CCMA members in the formulation of codes. This will help in the standardization process. Apart from initiatives by individual companies like Pidilite and Dow Corning, the CCMA is promoting the use of construction chemicals in India by conducting technical seminars and awareness programmes for end users in the applicator community. These notable initiatives by the CCMA will go a long way to enhance the abysmally low level of awareness among the construction community and also ensure stringent quality standards for manufacturers, contractors and the actual applicators.






Sixth plant in India strengthens local supply of high quality admixtures


BASF India set its sixth plant for concrete admixtures in West Bengal in 2016, to meet increasing demand for its popular Master Builders SolutionsTM brand series in India’s eastern region. The facility manufactures custom-made performance-based concrete admixtures such as MasterGlenium®, MasterPolyheed™, MasterPel™ and MasterRheobuild™, as well as chemical solutions for underground construction under the MasterRoc™ product brand. The facility has a well-equipped concrete lab to deliver tailor-made recipes through formulation excellence.


 “Asia Pacific is one of the fastest growing markets globally and India is a strategic growth engine of this market. The Kharagpur plant will help us better serve the growing demand for durable and energy efficient construction materials, which will make ‘Smart City’ a reality in India,” says Christian Mombaur, Senior Vice President, Construction Chemicals Asia Pacific, BASF.


“Fast and flexible solutions are essential for the construction industry. Our sixth construction chemicals plant in India enhances our flexibility to serve our customers with prompt supply and shorter lead times, especially in the eastern and the north-eastern parts of India. This plant complements the other BASF construction chemicals plants, located in Nalagarh in the North, two at Navi Mumbai in the West and Mangalore and Nellore in the South, thereby strengthening our production and service footprint across India,” explains Dr. Raman Ramachandran, Chairman & Managing Director, BASF India Limited and Head, BASF South Asia.



Sika’s ViscoCrete® enhances concrete pumpability


A major challenge in tall building construction is maintaining vertical pumpability of concrete to big heights, while preserving its low viscosity. Sika’s ViscoCrete® plasticizers do this job well,“ says Ibrahim Shaikh, Senior Product Manager, Sika India.


Most tall building projects use high performance concrete (HPC) ranging from 50Mpa– 100Mpa Requirement of HPC:

  • Very low water/Cement ratio generally less than 0.3
  • Considerably high cement content
  • Part of cement is replaced by cementitious materials
  • Use of High efficient Superplasticizers


Challenges for Making High Performance concrete:

  • Variations in fine and coarse aggregates
  • Different source of cement with varying mineralogy
  • Different cementitious materials properties
  • Varying climatic conditions


A robust Superplasticizer is the solution to the above challenges - Sika® ViscoCrete® technology. Because of very low water: cement ratio and high fines content, the concrete becomes very sticky, very viscous and difficult to pump.


Sika® ViscoCrete® technology helps in reducing the viscosity, yield stress, giving better fresh concrete behavior even at such a low water : binder ratio so that concrete can be pumped easily to the required height.




Sika Viscocrete
Sika ViscoCrete Superplasticizers use admixture technology based on new generation PCE polymers. PCE polymers are very versatile polymers unlike SNF polymers. PCE polymers are tailor made and can be designed according to specific requirements.
  • Adsorption speed
  • Water reduction
  • High workability
  • Reduced Stickiness
  • Stability / Viscosity
  • Slump retention without retardation
  • Less sensitive
According to above properties polymers could be formulated to achieve desired properties.
With the use of Sika ViscoCrete technology following properties could be well achieved:
  • Better fresh concrete behavior
  • Stable mix
  • Less viscous
  • Less stickiness
  • High water reduction
  • Slump flow retention without retardation
  • Durable concrete structure
  • Better cost performance
  • Sustainable concrete mix
  • Easily pumpable to the desired height

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