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  • ACP Sector to Witness Robust Growth Under GST Regime

    28/August/2017 Ply Reporter 

    In India, the market for ACP industry is close to 2200 crore with presence of around 45 manufacturing units across the country. According to ACP industry pioneers, the share of branded players was on a down ward trend since last 5 years because unethical practices were becoming rampant among the unorganized category players. But GST has given a level playing field which was much needed for the better of infrastructure growth, economy and organized business practices.

    With presence of around a dozen of brands who do not have their own manufacturing facility, the market was going to its bottom. Now after GST, the sector is slowly moving towards organized players hence many brands will follow the ‘brand formula’ and increase the supply of good quality value added materials with new products. The branded ACP players will have plenty of smiles in GST regime and expect double digit growth in its net profit.

    Mr Naresh Garg, Managing Director of Alex Panels and Black Cobra, Wudpla claims, ‘At 18 percent GST slab, ACP segment is one of the product categories among building materials which is set to gain at large and will be witnessing greater transparency within next two quarters. He says that ‘Small players, who were spoiling the market with poor quality material at below par rates, that was never possible without unfair billing practices, have suddenly gone in to back yard.’ The time is coming when fruit for ethical and organized working shall be rewarded and prices are not the only criteria for genuine customers.

    Mr Pawan Garg, Director, Alstone says, “I thank, Central Government for 18 % GST on Aluminium Composite Panels product, which has been giving good opportunity for the growth of organized companies. Since a month under GST is completed, and I observe so many benefits of it, because order flow has increased more than 4 times compare to last few months. Order pendency period has gone more than 30 days, which was just 7 days period last month. Customers are bullish to buy material from us because they earn good margins due to our quality and system. Unorganised ACP producers are suffering a lot and they are struggling to remain in business, their market share must be shifted to formal sector with 3 to 6 months.’

    Mr. Rajesh Shah, Managing Director, Eurobond states that 18% GST on ACP is good sign for this industry. It helps this sector to grow in future because we feel its advantage in just one month time. Organised sector will be benefitted and the product will reach to new markets and applications. The product demand will grow more in those states where the VAT was levied 12.5%. “I see double digit profit growth by next year for organized sector,” he added.

    Mr. Bhawesh Patel, Director , MAPL says, “18 % GST on ACP is good for the growth of this sector, which has given opportunity for all to grow more with fresh mindset in new India. The application of ACP has increased in many new area since last two years, where we have got much advantage under GST, and our share will increase further. Gujarat based ACP producers are more advantageous position under GST and we see very much growth in future.”

    The ACP industry uses ‘Plastic granules and Aluminium coil ’as key raw material that attract full input credit hence benefitting the manufacturers at max. This sector is largely dominated by a few of brands in organized segment. There are few, who have begun the planning to increase their market share further by opening new area. Major industry players are happy with uniform taxation system nationwide that will help them to grow further.

    The other competing products of cladding like marble, tiles, wood etc have become costlier, where as ACP is on the same levels, which made it the most benefitting.The formal industry sector thanked government of India for 18 % GST slab on ACP, and opined that it will help them to grow their business further in new area. They are planning to reach out to tier 2 and 3 cities with aggressive marketing plan and see variety of new applications as well as residential usages. Leading brands and organized industry players are of the view that ‘now it is a level playing field’ and organized players will be able to capture the market share of unorganized ones as their prices are now higher.

    The ACP sector is also hopeful of their growth with thrust on speedy completion of projects from government as well as private sector. The demand for commercial spaces, government activity for public facility structures like ‘ New Airports, Metro rails, Railways, Bus Stands and Public Utility Centres’ and expanding urbanization will boost the prospects of ACP uses in coming years. With not many players in ACP manufacturing, this product is expected to improve on its marketing efforts, design as well as margins.

    Compared to previous two years, Aluminum Composite Panel will find a better reception this year due to government focus on infrastructure boost, launching of new government projects, Commercial buildings, announcement of new Metro Rail lines in major cities, arrival of new industries and industrial belts. The innovation in new designs and colors will also boost the demand of ACP, with growing confidence of Architects, Fabricators and Builders. ACP is one of the most non-cluttered sectors where just 30 to 32 players are catering to whole Indian market. This product category relies on architect’s approval and fabricators where payments through cheques and PODs have been a practiced culture that is helping ACP to be immune from GST impacts.

    The new taxation system may also help the growth of partition panels’ demand with better profit margins, which is known as commodity grade ACP. The organized ACP segment smells their growth in this category also with good quality products and retail driven marketing efforts that is mainly driven by informal sector earlier. The increasing application in residential façade, shop façade, gift packaging, interior paneling etc has helped the ACP market expansion to new heights.

    The lead ACP brands like Alstone, Aludecor, Alstrong, Alucobond, Timex Bond, Alex Panel, Viva ACP, Euro Bond, Alutuff, etc are planning to take advantage of new taxation system with expanding their market efforts, new product innovation, attractive range, décor finishes and colors.

     

     

     

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