‘PEB industry to grow at 25-30% over next 3-5 years’

Tiger Steel Engineering India Pvt. Ltd. (TSEIL) is a 100 per cent owned subsidiary of Tiger Steel Engineering LLC, in UAE. TSEIL is amongst the top PEB manufacturing companies in India.

P.K. Nagarajan, CEO – TSEIL told Sandeep Menezes that higher economic growth will primarily drive PEB growth but possible measures such as rationalisation of statutory levies, introduction of GST could provide the acceleration going forward.

Excerpts from the interview:

P.K. Nagarajan

P.K. Nagarajan

With the new government having taken charge and renewed optimism across the Indian economy, how much growth do you foresee in the PEB industry?
The new Government’s main agenda is development and theme is ‘Make India.’ This means setting up of greenfield projects in manufacturing plants, logistics, warehouses, infrastructure development in power, shipyards, railways etc. All which will drive the demand for PEB. Over the Next 3-5 years, PEB is set grow at 25-30 per cent.
India is a cost sensitive market and the initial higher cost barrier is one of the reasons for lower uptake of PEB, Prefab technology. Going forward, do you feel PEB construction could be made more affordable?
Currently PEB components are manufactured off site at state-of-the-art manufacturing plants. There is an incidence of excise duty of 12.36 per cent which is not applicable in case of on site fabricated steel structures. There are two ways to address this disparity one is to allow the ultimate customers to avail of Modvat Credit of the excise duty paid on the PEB or make excise duty nil all over India. These measures will help in reducing the PEB prices and make it more affordable. However the larger point is the higher economic growth, which will primarily drive growth in PEB. Measures such as rationalisation of statutory levies, introduction of GST will provide the acceleration going forward.

India had a shortagee of 18.8 million urban housing units with rural housing estimated to be much higher. Do you feel PEB can emerge as a preferred mass market low cost housing option?
The key issue is the speed of construction to meet the demand for housing units both in Urban & Rural India. Steel based construction will have an edge over the conventional brick & mortar construction methodology, more so due to scarcity of resources such as water, shortage of skilled masons and rising costs of conventional building materials such as bricks, sand, etc. The main advantages of steel based construction are faster execution of projects, better earthquake resistant properties and higher strength weight ratio.

Therefore using pre-fabricated technology is a good solution for low rise residential building applications since the building components can be manufactured off-site and transported to job site in knock down construction and be installed quickly. Even though the concept sounds good, for it to take off on a mass scale, we need to work on creating awareness, training & development, also developing relevant building codes, standardisation of details that integrate all the building elements like floor, wall, services like electrical & plumbing etc. There is also a mind-set which needs to be overcome that buildings in brick and mortar are rock solid and will serve many generations by building in steel and demonstrating.

Our view is that steel construction in residential construction though initially slow to take-off is expected to pick up momentum in years to come. Therefore in the medium term, we will see a mix of solutions being adopted like prefabricated steel composite construction, prefabricated RCC etc.

In terms of safety and eco-friendly features, how does PEB compare with convention building materials?

PEB are safe, designed to the Indian and other International codes, ensuring its structural stability and Performance. Since our buildings are made out of steel its green (don’t require cutting down valuable forests), as the design and construction material used significantly reduces or eliminates negative impact of the buildings on the environment and its occupants. We employ energy efficient methods for steel fabrication that helps to substantially reduce the green house gas emissions at our state-of-the-art manufacturing facilities. We use natural lighting, natural gravity ridge ventilators & louvres for achieving required air changes to provide healthy and comfortable indoor environment inside the plants.
Does the PEB industry expect some kind of policy-push from the government and local bodies?
Government support in creating positive investment climate, privatisation, clearing stalled projects and faster clearances for new projects will definitely drive the demand for PEB, some of our suggestions are as under:

– Quickly reinstate the capital subsidy for agro ware housing sector.
– National policy on housing that will help in growth & development of this sector.

– Rationalisation of statutory levies like excise duty & introduction of GST.
What is TSEIL’s long term business strategy in the PEB construction segment?
Tiger Steel in India currently has three manufacturing sites for PEB in India – one at Murbad near Mumbai in the western region, second one at Haridwar in the North and third one in at TADA in A.P through tie up with India Metal one Steel plate Processing Pvt Ltd (Joint Venture between Metal One & Keiyo Blanking Kogyo, Japan).
Tiger steel was first to set up PEB manufacturing facility in India in 1998 and since then executed some land mark projects in India for Japanese epc companies Like Sumitomo Constructions Corpration, Shimuzu, Takenaka, Doosan, Indian and Multinational companies like Reliance, HLL, ITC, Louis Dryfus, Cargill, Ashland, International Tractors, PTC , Motorola, Samsung, Saint Gobain Glass, Tube Investments and many others.
At Tiger Steel, our strategy is to provide innovative solutions to needs of our customers in PEB construction segments such as industrial, warehousing, commercial & residential.
Tell us about few of TSEIL’s recently executed PEB projects in India?
Few of our projects in India include:
-Tube Products India (Murugappa Group) – Higher Diameter Tubes Plant at Tiruttani, Tamil Nadu.
-Yamaha Vendor Park at Orgadam, Chennai.
-Shri Shubham Logistics Dry warehouses at Jalgaon, Jodhpur.
-Denso at Jhajjar.
-Honda Cars at Tapukhera.

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