‘Future Growth and main demand drivers across India’s pipe industry’

-By Hiranand Savlani, Chief Financial Officer – Astral Poly Technik Ltd.

Hiranand Savlani

Hiranand Savlani

Over last ten years plastic piping industry has been seeing a very strong demand mainly from new construction earlier five years in metro cities and last five years from the Tier II and Tier III cities. Besides new construction demand, there is a huge demand for replacement of metal pipes to plastic pipes mainly due to the corrosion, rusting, scaling etc.

Since last five year the industry is growing at 15 per cent CAGR. This growth momentum is to continue in coming years also mainly because of change in the government. Prime Minister Narendra Modi believes in creation of Infrastructure which needs different kind of pipes. Beside he has announced that every Indian should be having a house by next decade – this will create huge demand for low cost housing segment and each such segment will need pipes for plumbing, sewerage, rain water etc.

With this change of guard in government, capex cycle of the industry will also revive which will also consume lots of pipes in coming years. Piping industry for next decade will grow again at 15 per cent CAGR which is mainly because of demand in agriculture pipes, plumbing pipes and industrial pipes.

Piping Industry of India was approximately Rs. 215 Bn consisting:

Irrigation:     Rs 33 bn

PVC Pipes:  Rs 165 bn

HDPE:          Rs 15 bn

PPR etc:       Rs 2 bn.

Indian piping market is still unorganized to the tune of 40 per cent to 50 per cent but with growth of GDP and Per Capita Income – it will ultimately move to organised players. In last few year customers are moving from unbranded to branded quality pipes which is the key reason for growth of organized players.

India has irrigation potential of 140 mn hectares. Out of this, only 40 per cent is under irrigation hence there is huge potential for PVC pipes.