According to a report by HDFC Securities, the building material market is expected to experience significant growth in the next 4-5 years. The demand for building materials such as tiles, plastic pipes, and wood panels is projected to increase by 8-12% during this period.
Factors contributing to this growth include India’s push towards urbanisation, the recovery of the real estate market, a positive outlook for the hospitality and healthcare sectors, and rising discretionary spending.
Wood panels, particularly in the MDF (Medium Density Fiberboard) and particle board markets, are expected to see strong growth opportunities. The exports of tiles and laminates are also predicted to pick up after a muted 2022, with MDF exports already gaining traction.
The government’s focus on infrastructure development, including roads, railways, metros, and airports, is driving India’s urbanisation efforts and improving connectivity. It is estimated that by 2025, 38% of the Indian population will reside in cities, compared to the current 33%. Additionally, by 2030, 80% of the Indian population is expected to be classified as middle class, up from the current 50%.
Despite a large and growing population in India, furniture manufacturing and consumption remain relatively low. Organised furniture players currently hold only a 20% market share, with demand being met through imports. However, the Indian furniture market is projected to grow threefold between 2020 and 2035, indicating a strong outlook for domestic manufacturers of plywood, laminates, MDF, and particle board.
RTM Watch’s Take
As the government emphasises infrastructure development and urban expansion, coupled with a rebound in real estate, demand for building materials is on the rise. Positive prospects in hospitality, healthcare, and increased consumer spending further boost industry growth. Yet, challenges like raw material availability, price fluctuations, and import competition persist. To succeed, companies must prioritise innovation, diverse products, and efficient supply chains. Despite hurdles, the building material industry in India is set for growth, offering a promising landscape for adaptable companies meeting consumer needs.
