The industry needs the customs duty on PVC to be brought down from 10% to 7.5%.

Siddharth Bansal

- Director, Skipper Limited

PVC pipes have gained popularity because of its two most important features-cost effectiveness and durability. The government's various initiatives will also be the key drivers for future growth.

What is the current market size for PVC pipes and fittings in India? What is the current and expected CAGR, and the growth drivers?

 The pipe industry in India has witnessed robust growth and has reached an estimated value of Rs 300 billion by the end of FY 2019.  Going forward, the Indian plastic pipe industry is estimated to register a 10% CAGR by 2024-25 to reach Rs 500 billion.

 The primary growth drivers of this market in India are well supported by the government investments in irrigation, and housing & sanitation, through schemes such as Housing for All, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Pradhan Mantri Krishi Sinchayee Yojana (Prime Minister Agriculture Irrigation Scheme).

Further, the amplified demand for housing which is attributable to the ever increasing population as well as the rise in personal disposable income will also drive the overall growth of this segment. Further, there has been a drastic shift of demand from metal to polymer based pipes, especially in plumbing and piping application in the construction industry. This has led to an increase in usage of plastic pipes and emergence of CPVC pipes for hot and cold water plumbing. In order to encourage the sector, the Government of India has been placing orders for sewage, water supplies and plumbing pipes. Continuous increase in allocation of irrigation and housing by Government of India is going to give momentum to the piping industry. With rapid growth in population, there has been an increase in demand for residential applications of pipes also.

 What drives the market…

• Increasing government investment in agriculture and related activities will augment the growth in PVC pipes and fittings market in India.
• The rise in population will lead to growth and will be a major contributor to the PVC pipes and fittings market in India through increase in demand for housing.
• Growing problems of water shortage will also lead to increase in demand for PVC pipes and fittings.
• The demand for pipes is influenced by rising disposable income of the middle class population. Presently, there is a shift in terms of lifestyle changes, wherein people prefer branded and quality tiles/faucet/ceramic to renovate their homes and enhance the aesthetic appeal of bathrooms. This will in turn create demand for pipes as well.

How has the PVC pipes and fittings evolved especially in terms of use of innovative and environment-friendly materials, reduction of energy and noise, and predictive maintenance solutions?

Polyvinyl chloride (PVC) is the third largest selling plastic commodity after polyethylene & polypropylene. Due to its intrinsic and chemical properties like durability, less cost and others, PVC has an edge over other building materials like metals, wood, concrete or clay in different applications. The compound is also corrosion resistant, flame-resistant, and easy for installing & usage. Plastic pipes and fitting market is segmented into plumbing &agriculture. Plumbing pipes mainly includes UPVC, CPVC, HDPE etc. whereas agriculture pipes includes Rigid Pipes and Fittings. Of these, UPVC & CPVC has accounted for the highest revenue share, followed by HDPE pipes and fittings.

UPVC pipes and fittings have major demand in the market due to its cost effective nature and wider range of applications into sector like irrigation, sewerage, water supply, plumbing and bore-well system. CPVC pipes are used for both hot and cold water distribution systems and are a significant addition to the bathroom fittings. PE (polyethylene) includes HDPE and LDPE pipes and fittings. The application areas for these pipes are mainly in municipal and environmental applications and agriculture.

UPVC plumbing system is an easy & economical product for distribution of water in residential, commercial & Industrial buildings with many advantages over the conventional piping system. This plumbing system offers a maintenance free solution for a longer service life. UPVC is beneficial over other materials, owing to its high chemical corrosion resistance, strong and light weight and at the same time is a good insulator. UPVC pipes and fittings are made from a non-toxic plastic compound and are absolutely 100% lead-free which makes it environmentally friendly or completely safer. These plumbing systems have a shelf life of 50 years and more and are devised in a way that they are resistant to any kind of bacterial growth.

Marketing its product under the brand name of 'Skipper', the Company manufactures premium quality polymer pipes and fittings which serve both the agricultural as well as plumbing sectors. The Company's pipes are built using cutting-edge technology and are created after years of research and development. Sourcing the best quality raw material for the pipes is what underpins the quality of our output. Then with the help of our state-of-the-art machineries and our highly skilled labour, Skipper has been successful in developing piping solutions for our customers which not only meets our customer's requirement but are also of top-notch quality.

What are the anticipated challenges during the post-covid era?

Covid 19 has almost tested the resilience of humanity in every possible manner and we all are in fact now getting back to the normal mode slowly. Its been a silver lining that the Polymer Pipes & Fittings industry has been relatively less impacted. Unlike categories like wood panel, ceramic tiles and sanitary ware, PVC Pipes & Fittings are not largely classified as discretionary spends. They are thus less likely to see deferment of demand in the near term due to Covid-19 outbreak.

While prolonged lockdowns in several states on account of Covid-19 impacted the entire building material sector, the organised plumbing pipe segment is likely to be relatively less impacted due to the following reasons: 1) the ongoing restructuring in the PVC/CPVC pipe segments; 2) strong growth in affordable and mid-income housing projects, due to government's initiatives; and 3) sustained replacement (need-based) to the traditionally used GI/CI pipes. However the first quarter demand in metropolitan and key tier-1 cities has seen some deceleration with calibrated lockdowns, particularly in the second fortnight of March 2020.

What policy / regulatory reforms do you expect from the central / state governments for the healthy and sustainable growth of the industry?

 The industry bodies in several meetings have demanded restructuring of the custom duties, anti-dumping duty on import of finished products, review of foreign trade agreements, enforcement of mandatory BIS standards and availability of the technology upgradation fund for industry, among other things. The industry needs the customs duty on PVC to be brought down from 10% to 7.5%, as nearly half of the demand in India is being met through imports due to lack of domestic capacity. Any increase in customs duty will affect the agriculture sector due to [its] high use of PVC pipes and fittings,

Tell us about your road for the next couple of years - in terms of investment / capacity augmentation / new products and solutions?

Skipper Pipes is looking at consistent growth over the next couple of years. We have been increasing our reach in the market month-on-month and we see huge growth-potential. We are currently engaging with more than 20,000 sale touch points across the country and we are looking at this number doubling over the next couple of years.

Our robust systems allow us to anticipate growth in sales well before time and we have multiple checks and balances to take an informed decision to increase capacities. That said, we have regularly been updating our infrastructure to improve our efficiencies and faster deliveries to our customers.  

Skipper currently offers a complete range of pipes and fittings for plumbing, sewage and agriculture applications. Very recently, Skipper has also entered the Bath Fittings Industry, and launched multiple ranges of bath fittings and accessories such as Flush cisterns, Faucets, Shower-heads and many more products in both plastic and CP (Chrome Plated) options. The goal is to become a one-stop household name for all bathroom solutions.

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