Despite the Indian government's ban on the production of clay bricks to encourage the use of fly ash bricks, there will still be a significant demand for clay bricks, particularly in Tier 2 and 3 cities: Ken Research

27-Mar-2023   Mr. Anant Jain, Designation: Brick Manufacturer, Karnataka Brick Kiln   Author: Srijan Kishore Saxena

In conversation with Mr. Anant Jain, who currently runs a clay brick manufacturing business we tried to understand the overall Bricks and Blocks Market. We also discussed the typical wastage of bricks and future outlook in this industry.

Despite the Indian government's ban on the production of clay bricks to encourage the use of fly ash bricks, there will still be a significant demand for clay bricks, particularly in Tier 2 and 3 cities”.

Q1. How is the overall Bricks and Blocks Market in Karnataka?

The change of government policies regarding the manufacturing set-up of a clay brick kiln and the advent of fly ash bricks in the market is hampering the overall industrial growth of clay bricks in the market. There are major FCBTKs and Clamps in the state, but now there has been a technological change in the brick kiln technology i.e., High Draft Kiln or Zig-Zag kiln, which are more environment friendly in comparison to FCBTKs and some other technology. The market of clay brick would remain in the future as well but with a relatively slow growth but we can expect an increase of fly ash brick manufacturing units.          

Q2. Do these brick kilns operate throughout the year?

The major chunk of production happens during four months i.e., March to June. During heavy monsoon season, these kilns are stopped as there is no incentive to burn because its difficult to dry out the raw bricks which are made manually by labourers. The average duration of this drying process is around 3-4 days. The manufacturing of raw bricks is difficult in the rainy season thus manufacturing process is put on hold during these 4-5 months. Post that, manufacturers again start manufacturing the bricks in the market.

Q3. As government is incentivizing fly ash bricks, are people (as in general consumer) tend to use fly ash more or the market is for clay brick is still preferring clay bricks?

The use of clay bricks or traditional bricks is prevalent and will always be more than the fly ash at least for the coming years. Consumers don’t like change immediately. In construction business, these clay bricks have been in the market far much longer than fly ash which is a relatively newer technology in comparison with clay bricks. Even though government have started to ban clay brick kilns, manufacturers tend to import the raw clay bricks from other districts and also, the manufacturing process of fly ash bricks is expensive in comparison to clay bricks and it’s a completely different business model altogether hence even clay bricks manufacturers are not moving towards a change in their business model.

Q4. What is average per day production capacity of the brick kiln?

The average capacity of a large brick kiln is around 40,000-50,000 bricks per day. There are 3-4 chambers per kiln and it depends upon a manufacturer as to how many chambers per day he is burning. So, in case, a manufacturer burn just one single chamber, the average production would be around 18,000-20,000 bricks per day.

Q5. During offseason/ monsoon season, if there is any demand of brick how do you fulfill that?

This is not the case, there are around 1 lakh raw bricks which are made manually everyday by the labourers. Since the capacity is only around 40,000-50,000 per day and burning happens continuously every day. The overall production during the 4 months from March to June fetches enough bricks in order to tackle any off-season demand by consumer during monsoon season.

Q6. Are the prices also affected during the end of year?

The prices during the end of the year are always expensive because there is always a shortage of bricks in the inventory and manufacturing new bricks is again expensive for a low to medium scale manufacturer. A manufacturer always tries to sell its stock first before manufacturing new bricks from the kiln. A big manufacturing unit or a big company can still afford to manufacture bricks every day and even during off season, thus they always have the advantage over smaller manufacturers of brick kiln.

Q7. What is the typical wastage during manufacturing of bricks from a kiln?

Wastage can be defined as over-cooked or under cooked bricks and typically in case of a small or medium scale business, the average wastage of bricks is in the range or 10-15%.

Q8. Is transportation cost included in the prices of bricks?

The transportation costs are not included in the price of the bricks, the transportation cost depends upon area to area. Say, if the demand of the brick is within the same district as of the manufacturer the transportation cost would be different and if the bricks are needed in some other district, then transportation costs would differ. Usually, transportation cost is calculated per 1,000 brick loads. The range of price is around Rs. 1,000-1,200 per one thousand brick of truck load.

Q9. Is the market more organized or un-organized?

The market is mostly un-organized as there are no fixed labors in this industry. There is no fixed salary which is given to daily wage workers. Even child labour is prevalent in this industry. In case of clay brick kiln, 90% of the market is un-organized and there are very few companies which are using machinery-based technology in manufacturing of clay bricks and in case of blocks mostly all companies are organized

Q10. What is the average margin of the manufacturer or the supplier of these bricks?

There is no fixed margin in this industry as even manufacturers are not sure about the quality of bricks coming out the kiln. The margins are always fluctuating in this industry. A retailer’s average margin can be as low as 3% and can reach maximum around 7% depending upon the quality of bricks he is selling while a manufacturers margin on an average would be around 10%.

Q11. What types of bricks are used in high rise construction these days?

Concrete and AAC Blocks are now being widely used in the construction activities of high-rise buildings. Clay bricks are mostly used for small to medium scale structure only.

Q12. How do you foresee the future of bricks and blocks?

The overall bricks and blocks market has a big future considering the immense construction activities which are happening, the major question which arises is ‘What type of brick has a future?’. Indian market has a huge potential of construction activities. Even though Tier 1 cities in India are now mostly developed, but still the Tier 2 & 3 cities which will keep on demanding the bricks and thus market of clay bricks will stay. Even though the Indian Government is implementing plans for fly ash manufacturing, providing huge incentives and promoting blocks as well but clay bricks would be used extensively for the foreseeable future as consumers would still choose the traditional clay bricks over any other form of brick owing to its huge availability and cost.

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