By Nitin Chittal

Some time back the focus was on branding, now it is on value-addition. At last, local cement manufacturers are catching up with world trends. Areas that they are looking at are bulk transport and the ready-mix concrete (RMC) market.

RMC is nothing but a ready-to-use concrete, a blend of cement, sand, aggregates and water mixed in convenient proportion. Launched in Mumbai a couple of years back, RMC is now gaining ground in other metros too. The mandatory use of RMC in construction of flyovers provided the requisite impetus to its growth in Mumbai. Chennai is expected to follow suit.

Touch and go
The economics of RMC are simple. It takes just Rs 7-8 crore to set up a 100 cubic metre per hour plant, with 4-5 transit mixers. Each additional transit mixer costs around Rs 25 lakh. The plant has a mere 3-4 month gestation period. For the builder it means faster construction period and durable and quality cement with flexibility in mix. In addition, it does not cause air pollution and lowers storage requirement. The zero per cent excise duty is an additional inducement.

The stakes
Internationally, 95 per cent of cement usage is in the form of RMC. In India, however, the RMC industry is at a very nascent stage, not even accounting for 0.5 per cent of the demand.

Anticipating the huge potential all cement majors in the country (except Gujarat Ambuja) have entered the market. While ACC has set up plants in Mumbai and Bangalore, L&T has located its RMC unit at Chennai, although only for captive use. Madras Cements (MCL) has set up plants in the south while Grasim has also entered the fray.

The largest capacity, however, has been set up by a French non-cement manufacturing company, RMC Readymix, the second largest player in world RMC market. Pioneer, another leading player in world market, has also entered the Indian turf.