The Indian economy is on the cusp of transformation that will take it from a services-driven, traditional economy to a manufacturing and services-oriented modern economy. The construction and real estate sector, which is a critical cog in the wheel of this transformation, has seen rapid growth in the last few years and is expected to see even more exponential growth over the next decade. To support this massive demand for steel bars, METCON India has launched a new range of TMT steel bars.
They are high-performance TMT bars produced with an advanced version of the VAR process (Variant Activation and Reaction). These new TN bars have excellent mechanical properties and provide higher strength output compared to standard TMT grades. These high-performance steel bars cater to the needs of almost every type of structure being built today – whether it be commercial, residential, or hospitality spaces, hotels or hospitals, etc. They also help in saving raw material by using less bar length while retaining strength at different positions along its length to optimise yield and reduce wastage.
Indian Construction Industry: A Driving Force behind the rising demand for steel bars
India has been one of the most attractive investment destinations due to its large market, low cost of capital, skilled workforce, and relatively attractive regulatory environment. The country has also been rated as one of the most ‘forward-looking economies’ in the world and has attracted significant interest from investors in recent years. The construction industry, which includes building construction, civil engineering, and other allied activities, is the third-largest segment of the Indian economy. In the last few years, its share in the GDP has increased from 9.7% to 10.5%.
The construction industry has grown at a CAGR of 8.5% since 2012-13, with a significant rise in investments in the real estate and building construction segments. One of the key factors driving the growth of the construction industry in India has been the rising demand for residential construction. The total contracted value of residential construction in India has grown from 16.8% in 2012 to 19.3% in 2017. In addition to this, there has been an increase in demand for commercial and institutional construction, with a contracted value of construction growing from 19.2% in 2012 to 21.8% in 2017.
Why are TMT Steel Bars Important in Building Construction?
The strength of steel bars is measured by Yield Strength (YS) and Tensile Strength (TS). The yield strength is the amount of stress at which a material is expected to deform elastically i.e. there will be no rupture in the material even if the stress is greater than the yield strength value. The yield strength value is dependent on the material grade and the size of the bar. For example, if we look at a standard grade of mild steel bar like MS-30, it can be used for different types of construction work like flooring, roofing, columns, or walls. But the same MS-30 bar cannot be used in the construction of a high-rise building. The reason is, in a high-rise building, it is important to use a strong material with high yield strength and tensile strength values.
Key Issues Facing the Indian Construction and Real Estate Sector
There are several issues plaguing the Indian construction industry due to which the demand for steel bars is expected to rise at a faster pace in the coming years. Some of the key issues affecting the Indian construction sector are as follows:
- Lack of standardisation in construction practices: 0ne of the biggest issues facing the Indian construction and real estate sector is the lack of standardisation in building practices. This lack of standardisation has resulted in a poor quality of construction work, which has led to the depreciation of properties at a faster pace.
- Lack of capital: Another major challenge faced by the construction sector is the lack of investment in the sector. This lack of investment has resulted in a shortage of construction materials, which has led to a rise in their cost.
- Increased focus on environmentally sustainable construction: The Indian government has announced a special focus on environmentally sustainable construction, which has led to a higher demand for construction materials like steel, concrete, and others.
- Need for better coordination between the government and the construction industry: The government and the construction industry must work towards better coordination to overcome the issues and challenges faced by the Indian construction sector.
The Indian economy is on the cusp of transformation. On one hand, the government is taking multiple initiatives to increase domestic production and make India an export-driven economy. On the other hand, this transformation creates a rising demand for TMT steel bars in building construction. The ‘Made in India’ campaign and soaring domestic demand for homes has triggered investment from leading international players.
The trend of using pre-engineered buildings (PEBs) in residential projects has increased the demand for TMT steel bars in building construction. Supplementing the structural strength of buildings with such steel bars is essential to cut down costs and time spent on construction while also reducing maintenance costs over the life cycle of the structure. That’s why it is important to understand how TMT steel bars will impact the real estate sector and its demand for these components over the next few years.
The construction industry in India is expected to grow at a CAGR of 8.8% during the period 2018-2022. In the coming years, the industry is expected to see a significant rise in the demand for steel bars, which are one of the most important construction materials. As the Indian economy is on the cusp of transformation that will take it from a services-driven, traditional economy to a manufacturing and services-oriented modern economy, the construction and real estate sector, which is a critical cog in the wheel of this transformation, has seen rapid growth in the last few years and is expected to see even more exponential growth over the next decade.