Autoclaved Aerated Concrete Blocks, the sunrise segment in India’s building materials industry

Business

Mr. Mohit Saboo, Director and CFO, BigBloc Construction Ltd 

July 16, 2022: Technology has changed how we think, work, and live. It instigates a fresh approach to introduce new-age, better and innovative future-ready solutions. One such product is Autoclaved Aerated Concrete Blocks – AAC Blocks. Over the last decade, this Green and non-toxic building construction material has emerged as a preferred choice over red bricks due to its unique combination and superior build properties like strength, low weight, thermal insulation, sound absorption, and unrivalled fire resistance and economical. Thanks to its unmatched buildability, it emerged as the future of building construction.

India Opportunity

India is the second largest block manufacturer in the World after China. Indian block Industry is almost entirely unorganised, characterised by many small players competing at the regional level, having around 150-180 plants for AAC Block.

Despite the high growth of AAC Block in building applications during the last decade, it is only 7-8% of the industry, while 85-90% of the industry is still dominated by Red Bricks, which means enormous potential in the years to come.

The global autoclaved aerated concrete (AAC) market size is expected to reach USD 28.41 Billion at a steady CAGR of 5.3% in 2028, according to the latest analysis by Emergen Research. According to a recent report, the Indian AAC blocks market is anticipated to register a CAGR of 14.3% during 2020-27 to reach Rs. 11,000 crores.

AAC Blocks manufacturing is gaining prominence in the Indian market, and a large number of plants are being set up across the country, especially in Western India.

A large number of Integrated Townships, Mass Housings (for Urban Poor, Slum Rehabilitation etc.), IT/ITES parks, High rise buildings and SEZs’ are commonly seen these days with AAC Block, and the growth in the segment will only increase exponentially in the years to come.

“The Indian market well accepts AAC blocks. Its use will grow stupendously in the coming years owing to increased awareness amongst the builders and architects about the several beneficial attributes of AAC blocks over red clay and fly ash bricks. Shortage of urban labour and high interest costs have forced developers and construction companies to look for faster and more efficient building materials. 

In addition to its adherent benefits, projects constructed using AAC Block compliments the project management in terms of speed, consistency and quality of the construction. In the domestic market, key factors such as pent-up demand and the Indian government’s impetus through numerous infrastructure & housing projects and regulations to use eco-friendly construction material under its net-zero carbon emission mission are the primary factors to steer the AAC market growth,” said Mr. Mohit Saboo, Director & CFO, BigBloc Construction Ltd.

BigBloc is the only Listed company in the AAC Block Space in India and the largest in Western India. In the coming time, the company plans to launch products including ALC Panels, Tile Adhesives, Gypsum Plaster, and other construction chemicals. The company has the vision to become the largest manufacturer of AAC Blocks and Panels in India in the next 2-3 years.

With increasing regional government projects and expanding real-estate industry, demand for autoclaved aerated concrete is expected to see an upsurge. The Indian government’s ‘Housing for All by 2024’ is a major game changer for the industry, as also projects such as Pradhan Mantri Awas Yojana, Police Housing, Kanya Shiksha Parishar, etc., where the government has made it mandatory to use AAC Blocks.

India is likely to witness an investment of around USD 1.3 trillion in housing over the next seven years, during which it is likely to witness the construction of 60 million new homes. The union cabinet has also extended the validity of the PMAY-Gramin programme till March 31, 2024, to achieve the target of constructing 2.95 crore houses.

Green Solutions to the growing urbanization

Growth in the infrastructure sector, growing preferences for low-cost houses, and an ever-increasing focus on green and soundproof buildings are driving the AAC market. Due to their energy-efficient properties, along with being fire resistant, termite or pest resistant, seismic resistant, lightweight, sustainable, quick and easy to application, AAC blocks have emerged as a preferred choice.

The construction industry, for the longest time, used red clay bricks. The fundamental issue, however, is that it used red soil for mass production, which is cultivable soil that reduces the forest area.

AAC is a natural and non-toxic construction material that saves energy and is eco-friendly. Additionally, the thermal insulation properties of AAC blocks reduce energy consumption and help fight global warming resulting in savings during the life of the building.

We are the only company in this segment which generates carbon credits”, said Mr. Mohit Saboo.  

“The increasing carbon footprint on the environment is a growing concern. The company has a commitment to producing green building products and solutions, and the ultimate aim of helping the Construction and Infrastructure Industry to build green and sustainable habitats has been the company’s vision. With the vision to Conserve Soil – NXTBLOC, a green product for the industry, was launched by the company,” he added.

The carbon footprints of NXTBLOC AAC blocks are considerably less compared to traditional walling materials (per sq ft carbon levels: AAC blocks 2.13 kg of CO2, clay bricks 17.6 kg of CO2, concrete walls 14 kg of CO2). Aiding further, the lightweight of NXTBLOC AAC blocks reduces the carbon emission as more cubic meters can be transported per truckload as compared to traditional walling material (3 trucks of traditional material in cu m equates 1 truck of AAC blocks in cu m).

Manufacturing Process of AAC Blocks

Economics and Faster execution also drive the growth 

AAC Blocks help by building the home better, faster and cheaper by use of innovative construction technologies and have emerged as a building material choice and a suitable replacement for clay bricks.

Pricing of raw materials – lime, cement, petcoke and aluminium powder also currently in favor of AAC blocks compared to clay bricks.

Fly ash is one of the key raw materials for AAC blocks. In India, many thermal power plants generate a lot of coal waste (fly ash); AAC blocks use this as raw material and provide a green solution to India’s brick industry. In addition, over the last decade, prices of bricks have risen considerably compared to AAC Blocks which further gives it a competitive advantage over bricks. AAC Block prices are around Rs. 4000 per cbm, while brick prices have crossed Rs. 5500 per cbm.

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