Housing Sales-to-Supply Ratio Rises to 1.36
Amidst controlled new housing launches, the residential sales-to-supply ratio has improved to 1.36 currently, as ag.. September 2020
While Pranav Desai, Head - CDIC and New Product Development, Nuvoco Vistas Corp, along with his team, recently took the CW team on a detailed tour at CDIC, spread across 17,000 sq ft, to explain its working and activities, Madhumita Basu, Chief of Marketing, Innovation, Strategy and IT, Nuvoco Vistas Corp, shared insights on the company and its future plans in conversation with SHRIYAL SETHUMADHAVAN.
CDIC clearly speaks of the company’s focus on R&D. Please tell us about the company’s investment in this area.
We are not really chasing a particular percentage of the turnover. It is not about being among the top five research companies and investing a certain part of the business into this. Our focus is on building a robust agenda for the centre. Concrete is a finished product, and being in the construction space, the genesis of CDIC has largely been the concrete space. So the centre does not only look at just the material side of it, but the placement and finishing, and ensuring it is an end-to-end solution. Typically, in that case, CDIC is about 0.5 per cent of our concrete business top-line. Additionally, the centre has also been bringing easy ready-to-market solutions like microfiber cement. This is a unique product in the industry not only in terms of what the fibre does for the cement, but lends testimony to the calibre of high speed operations of the organisation.
While the company supplies to projects pan-India, it has only one CDIC centre based in Mumbai. Does this pose a challenge?
The nuances are different in every place in India. Infrastructure projects are crucial today; yet 65 per cent of cement goes into Individual Home Builder (IHB) operations. Certainly, in our blueprint, in the next two years, we are looking at a satellite to this centre out of our concrete plants. Having received clearance for two, we are trying to push for another centre as well. So we are working around two centres between Delhi, Chennai and Kolkata this year. We need to operate closer to the customer and this will help in quick sampling, leading to a better interface with the manufacturing team. Also, at times, there has been a fair bit of delay between the concept of an idea and speed to market. The satellites would help address this issue.
Which building or infrastructure segment contributes maximum to your business?
It is largely the real-estate space. Homes still form a larger part of the matrix. Speaking of our cement footprint, we also focus on Individual Home Builders. This space has allowed us the early opportunity to go with differentiated products. We not only offer strong cement but the factors we focus on in our cement design include the kind of workability it can give.
Geographically, where does your strength lie in terms of sales?
Our concrete business is strong in the south and west. In the north and east, we are strong cement players. We service Madhya Pradesh and a part of Uttar Pradesh between our north and west plants. So we have a strong presence between the two businesses. There is definitely a leveraging base in the east and north for the concrete business. We are looking at some more home builder-specific solutions, for which we have started an engagement with our cement channel partners, particularly because we have the concrete range in bags. We have already kick-started this process in the east.
How many channel partners do you have?
Including the dealers and retailers we have in our northern, central and eastern footprint, there are about 18,000 to 19,000 channel partners. We continuously run engagements with them, such as loyalty-driven programmes and several other activities.
How do you see 2019 panning out for your company in terms of growth?
Cement and concrete mirror the same consistent growth rate, which has been consistent on a year-on-year basis at 6-7 per cent. At the micro-market level, there have been localised issues like that related to the sand mining ban in states such as Jharkhand, Bihar and Bengal; but some of these are correctional issues also that would be faced by any growing economy.
As far as Nuvoco is concerned, at present we are at 100 per cent capacity utilisation. We have fresh capacities kicking in, owing to which we have planned a 1.5 million tonne expansion in the company’s Jojobera plant (located in the east). In the north, we are part of the Nirma Group; the group has its own cement operations and we have a procurement agreement. We procure under our quality specifications and manufacturing guidelines from their plant facilities for our markets. In this area, we are seeing capability to double sales in the near term.