How do you view the uptick in the real estate industry? How well does it bode for the building materials industry?
The prime minister’s focus on housing and infrastructure, PMAY, Housing for All schemes, and smart cities will spur the overall demand in real estate in the long run. This will surely benefit companies that deal in building material, like Finolex Industries Limited, in the times to come.
In addition to various housing schemes the newly introduced regulation will also ensure quality growth in real estate. The RERA Act was brought in with the perspective to bring efficiency and transparency in the real estate sector. Needless to say this has been a great boon for consumers. It mandates developers to disclose project related details such as project plan, layout, and government approvals like sanctioned floor space index (FSI), number of buildings, etc. Therefore, it will enforce a better code of conduct and professional approach among the developers. Further, they will have to source their materials and services from only well managed companies if they have to stand true to their commitments.
Finolexis already deeply entrenched in the construction industry by virtue of being a key supplier of water management and plumbing solutions. We offer SWR pipes and fittings for soil, waste and rain water management; ASTM pipes and fittings for plumbing; sewerage pipes for gravity drainage, sewer flow and transportation of soil and waste discharge. Lubrizol, the inventor and pioneer of CPVC compound, has joined hands with us for manufacturing FinolexFlowGuardPlus CPVC pipes and fittings that are used for hot and cold water.
How confident are you about doing business with the real estate sector, following implementation of RERAand GST?
With the implementation of RERA and GST, the real estate market is expected to become more transparent. Since RERA has been implemented only in May this year, the benefits will take time to be felt. Similarly, GST has not only simplified the process of taxation but has also eased interstate transport of goods by removing redundant check points. The time lag between the states had curtailed growth of industries, and now after GST, we expect that transport efficiency will increase, which in turn will save costs in terms of time and delivery.
Having said that, we have never been doubtful doing business with the real estate industry. As a matter of fact, a significant portfolio of ours is meant for the housing and commercial development sectors, so we have had steady clients in the form of real estate developers for many years now.
What opportunities do you see for yourself and the building products industry at large?
At Finolex Industries, our endeavour is to take the lead in finding solutions for the real estate industry and augmenting its growth. With increasing urbanisation and a trend towards mega-townships, affordable housing is the only way out. Pipes and fittings are like the arteries and veins of the walls, and critical for maintainingthe sanitation and health of the buildings. With this understanding about how the safety of buildings and their inhabitants can be safeguarded through water management, we are strongly placed to benefit from growth in the sector. We have a wide reach with the help of 850-plus dealers and 18,000 retail outlets, and are able to serve housing projects in any corner of the country.
Which geographical markets, and what growth do you expect in your projects business?
Finolex operates pan India. We will be concentrating on all major metros and cities, with due focus on tier II cities as well. The Smart City mission of the government will be the growth engine, which surely will have spillover effect on the other nearby cities. Projects big as well as small will be catered to. In fact, small housing projects will give spread and depth, as more people will go for housing due to government schemes and a low interest regime.
Initial glitches of GST and RERA will be overcome in due course, that is for sure. The current slowdown is just a technical correction which many experts have confirmed, and growth is a matter of time. In the years to come, we expect remarkable growth in the project business due to these reasons. With the implementation of RERA, genuine builders and promoters with financial discipline will remain in the fray. Therefore, it will be a win-win situation for consumers, genuine builders, and companies of repute.