According to ‘Fenestration Industry Report 2019’ published by Anarock, growth of the realty market is a boon for the façade and fenestration industry, which is keen organising itself and also bridging the existing skill gap
With the Indian economy on an upswing and real estate and infrastructure industry growing steadily, the demand for facade and fenestration industry is on the rise. Industry research points towards India’s real estate reaching a market size of $1 trillion by 2030. This projection augurs well for the façade and fenestration industry. The current market size of the façade industry is pegged at Rs 15,000 crore and has been witnessing an annual growth of 20% as a consequence of rapid urbanisation and increased demand for office and other high-end glass façade buildings. However, uPVC materials still account for only 10% of the facade market. Likewise, the industry size for fenestration and curtain wall is approximately Rs 10,000 crore with 65% share held by fenestration and 35% by curtain walls.
The modernisation in the construction industry, led by growth in office space and economic centres, and with a focus on design elements, has proved to be a sort of catalyst for the façade and fenestration industry. With glass gradually becoming a preferred material due to its features such as light-weight, load-bearing ability, transparency, and aesthetics; the fenestration industry has naturally started to gain momentum.
Sharing his thoughts on the growth of the industry, Ajay Khurana, managing director of REHAU India says, “As for growth, the market has been expanding majorly due to rising awareness amongst builders and consumers, rapid urbanisation, growth in the residential realty sector, and increased adoption of eco-friendly and energy-conserving products. In fact, the residential sector accounts for the lion’s share of the uPVC fenestration market in India in terms of revenues.”
Industry reports state that the residential segment has observed a marked shift from the use of hardwood to aluminium and uPVC, primarily due to cost implications in sourcing good quality hardwood in requisite quantities. The industry is catering to demands of consumers in the higher end who are looking for quality and innovative products, while it is also trying to reach the lower end of the housing market. For the high-end customer segment, the players have come up with unique sliding systems, systems with extreme heavy glasses, hinged doors, and windows with performance glasses, etc. A few have gone on to introduce Smart Li aluminium window systems and internal doors that are mobile-controlled, lead-free uPVC window systems with tropical high-UV-radiation formulation, besides offering solutions that are environment-friendly, reliable and can be easily customised according to needs of the customer. At the same time industry members feel that due to the importance given by the government, affordable housing will emerge as a great opportunity.
Mario Schmidt, the managing director of Lingel Window & Door Technologies Pvt Ltd, remarks that the construction sector stands to gain immensely from the uPVC industry. “Before the emergence of uPVC windows, realty developers depended on on-site contractors who used basic equipment, and had absolutely no mechanisms for checking quality and accuracy.” He adds that with the industry getting organised under the aegis of UWDMA and fabricators setting up operations pan-India, the role of design, materials and technology in the making of windows have been sufficiently highlighted to builders, architects and end users. “With the growing presence of our members, real estate players are now able to rely on uPVC products that are factory-made and can be stored safely at their sites,” says Schmidt, who is also president of UWDMA. Also, new-age windows and doors come in a fully-finished or semi-finished state and can be installed within a short time, thereby helping the construction industry speed up deliveries and control costs.
Growth Drivers
The emergence of a new breed of malls, entertainment, hospitals, educational institutions, modern urban dwellings, proposed smart cities etc, is seen as the key growth driver for the façade and fenestration industry. For instance, a research report from Anarock forecasts that new mall supply is set to touch 10 million sft in top seven Indian cities in 2019, which is a three-fold jump – from 3.2 million sft in 2018. This is a pointer to the growth avenues for the industry. The development of smart cities, as well as rejuvenation of hundreds of other cities, will further usher in tremendous growth. At present, over Rs 98,000 crore has been approved for these long-term projects which include urban development, to comprise major commercial and institutional structures along with significant residential development across cities.
The renovation market is yet another business opportunity for players. Several old and dilapidated structures are being replaced or renovated to capitalise on their prime location by either giving a facelift or upgrading with the latest structural and construction elements. In renovation projects, care is being taken to adhere to green building norms which are more energy-efficient. “The uPVC windows are energy-efficient, and noise and weatherproof,” says Khurana, making a business case for use of uPVC in the renovation market. He adds that though their cost is higher than of aluminium ones, their acceptability is gradually increasing. “Despite being a relatively new concept in India, the market share of uPVC has gone up vis-à-vis aluminium, which continues to dominate.” Aluminium continues to be widely used in the market as it is available at lower cost and production is faster compared to uPVC; it holds 50% share and dominates the fenestration industry. With more than 40% of real estate space, tier II and tier III cities in India are witnessing unprecedented realty growth, and this bodes well for the façade and fenestration industry. According to realty reports, the retail real estate segment has seen investments of $6.2 billion in tier II and tier III cities between 2006 and 2017, signifying the opportunities.
Roadblocks
On one hand, the upside for the façade and fenestration industry is worth its salt; however, there are specific roadblocks that need to be addressed. “Lack of standardisation and low awareness about energy conservation and quality parameters amongst consumers has allowed the unorganised sector to flourish. Moreover, Indian consumers are price sensitive and they readily opt for low-priced inferior-quality products to lower their overall investment,” avers Khurana. He’s not alone; the industry body UWDMA too has expressed similar concerns. A report by Anarock on the state of the industry highlights that despite uPVC being established as the most preferred material globally owing to its multi-faceted properties such as security, easy care, long life, dustproof, thermal insulation, and low maintenance;, it is observed that in semi-urban areas aluminium or timber is preferred owing to differential costs. “Even in many government projects in rural areas, there is widespread use of mild steel. The local markets are still inundated with low-priced traditional materials which pose stiff competition to standard products,” the report adds.
Industry veterans rue that the short-term cost-saving approach of the customers has pushed the environment-friendly product to the back burner. While they blame lack of awareness among consumers for this, they equally blame reluctance on the part of many builders and engineers who only look to optimise costs. “Builders and engineers overlook the fact that façade and fenestration can minimise operational costs of buildings, and bring savings in energy expenses and help reduce the adverse impact on the environment,” cited the research report by Anarock. As a countermeasure, Khurana had this to suggest, “The industry should invest in showrooms and experience/application centres to deliver hands-on experience for the consumers, as this will help them make better choices.”
Highlights:
- Market size of the façade industry: Rs 15,000 crore
- Market size of fenestration and curtain wall: Rs 10,000 crore (with 65% share held by fenestration and 35% by curtain walls)
- New mall supply to touch 10 million sft in top seven Indian cities in 2019
Bridging the Skill Gap
As is typical with the building product industry, the shortage of skilled resources is impacting the façade and fenestration market. Kushal Bajaj, executive director, Geeta Group, had in an earlier interaction with Sourcing Hardware pointed out that when it comes to the aluminium window and doors industry, it has traditionally been dominated by unorganised fabricators. “It would be safe to say that nearly 95% of the players fall in this category. They are unskilled, or at best semi-skilled, fabricators who cut the sections on site to make a window or door. They lack the education, training and support needed to construct a perfect window that is expected to solve a particular problem,” he had remarked. However, various industry players in their individual capacities, as well as UWDMA, have taken upon the challenge to bridge the skill gap.
The newly-formed UWDMA Skill Development Centre (U-SDC) has commenced its second batch for the uPVC window and door fabrication course. “Our training programme skills 10th pass candidates on uPVC window and door production,” shares Schmidt. The enrolled students, who get a stipend of Rs 2,500 a month, learn to produce and install different types of uPVC windows and doors. “Graduates from this course will be placed in UWDMA member companies with salaries ranging from Rs 8,000 to Rs 10,000 per month,” he adds. The skilled manpower available in the market does not sufficiently meet the requirement of the sector, resulting in limited growth of the industry, rues Schmidt. “Considering this demand for quality labour from our members, UWDMA along with GIZ had partnered with the Government of Rajasthan for setting up this skill development centre.”
