We continued to pursue our growth trajectory in India. Despite 54 days of hard shutdown to contain COVID-19 in the first half, our sector has bounced back strongly in the second half. Adapting throughout the year, we enhanced our digital capabilities and focused on sustainable revenue growth and overall profitability.
Market overview
From contraction to strong recovery
The first strict lockdown – from 24 March to 17 May – to prevent the virus outbreak largely brought construction initially to a halt – although construction work on some infrastructure projects was allowed from 20 April. However, many thousands of construction projects were delayed.
After experiencing one of the world’s tightest lockdowns, India’s construction industry made a strong recovery in the second half of 2020. The Government’s programmes to revive the economy through investment in infrastructure and housing supported the return to growth.
Long term growth story
Population growth, urbanisation, industrialisation and the rise in disposable income remain key growth drivers of the construction industry.
India’s construction industry includes both real estate (housing projects, building offices, hotels, leisure parks, etc.) and urban development projects (highway construction, building schools, transport and healthcare infrastructure, sewage treatment, water supply, power generation, etc.)
Given the country’s ambition to modernise infrastructure, advance its cities with ‘smart’ development, and boost employment, India is expected to become the third largest construction market in the world by 2025.
Helping hands that show Ashirvad Cares
Our Ashirvad Cares programme in India was launched to provide a helping hand to underprivileged families in local communities – particularly those most affected by the lockdown. Through our COVID-19 Hotline, we reached out to more than 650,000 plumbers, mechanics and contractors, offering financial aid and health services to those in need.
This outreach extended to our own colleagues, many of whom were adapting to a new and unusual situation. Happiness Champions helped to protect our colleagues’ wellbeing, and direct support was provided to more than 130 employees and their families.
We also started to manufacture hand sanitisers and face shields, donating around 20,000 litres of hand sanitisers, along with COVID-19 personal safety kits and food parcels, to people in neighbourhoods around the country.
Strategy and performance
Adapting quickly to the COVID-19 crisis
Our traditional stronghold core markets were severely impacted by the COVID-19 crisis in the first half of 2020. Global PVC price volatility and shortages have also been a challenge to manage.
However, we adapted quickly, taking a series of actions to protect our people and our business during the year, which was critical to helping us bounce back. We have improved the services and solutions we offer, to meet our customers’ evolving needs. We have built ‘Digital Ashirvad’, a new platform that provides data-driven capabilities across the value chain. We have also improved communications with colleagues and customers.
Ashirvad – a ‘Great Place to Work’
In March 2020, our Indian business, Ashirvad, became the first Aliaxis company to be officially certified as a Great Place to Work. The certification is based on a global benchmark that applies data and insights from around 10,000 organisations across the world. It recognises that our workplaces have a high-trust, high-performance work culture, and attests to the great pride felt by colleagues across India.
Growth in key markets
The high-rise segment has been performing exceptionally well for us. We are also well positioned in the infrastructure segment, and are expanding into new segments, such as water management through our Anti Bacteria Water tank. With this innovation, Ashirvad provides a hygienic, safe and durable drinking water solution for its customers.
We have increased our revenue from our non-core markets this year, through diversification into adjacent segments. Among others, this included the successful launch of a new HDPE portfolio in the agricultural sector.
Handling the pressure at the Phoenix Aquila high rise building
The Phoenix Aquila is set to become an iconic landmark strategically located in the heart of the financial district in Hyderabad. With a drainage shaft inside the building, it was crucial that any solution would prevent foul smells. Our teams worked closely with the project designers to find a sustainable solution that would not only accomplish this objective, but also handle the pressure changes in the high-rise building.
Agile manufacturing and distribution
We have expanded our plants in South and North India and opened a new plant in the East of the country. Our entire supply chain organisation has also been revamped. By investing in new mega-warehouses, we can now serve customers in every corner of the country, using a ‘Hub and Spoke’ distribution model with a centralised warehousing and shipment system.
New Research hub
We opened a new Research hub in Bangalore in November 2020, increasing our capacity and speed to solve more complex problems. The 60+ team will facilitate the development of new technologies and cutting-edge innovation in the years ahead, to the benefit of our customers and end-users.
Looking ahead
We are encouraged by a combination of factors, notably a portfolio of government housing programmes and massive pent-up demand due to COVID-19 restrictions. We expect that this will drive a strong recovery in India’s construction industry in 2021 and well beyond.
That’s why we are ramping up our investments to support the high demand across segments. We will use our Research & Technology Centre to help maximise the opportunities from innovation. We will also continue to leverage the ‘Ashirvad Experts Club’, our aspirational, engagement and recognition programme for plumbers.
Americas
We continued to invest in customer and end-user driven innovation in North America, while in Latin America, we focused on markets with potential for sustainable, profitable growth.
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