Availability of AAC Blocks and Business Opportunities
Since quiet some time I have been studying availability of AAC blocks and business opportunities. I have been interacting with builders, developers, contractors, architects and civil engineers in Gujarat (Western India). Most of them are fascinated by Autoclaved Aerated Concrete (AAC) blocks. They are willing to use AAC blocks in their projects and recommend it to others as well. They prefer AAC blocks to clay bricks and other conventional construction material despite of AAC being more expensive. E.g. In Ahmedabad, 1 m3 of AAC blocks cost around Rs. 3200-3500 while 1 m3 of clay bricks would cost Rs. 2400-2700. In spite of the price difference, construction industry wants to use AAC blocks due to inherent advantages.
There is a very interesting connection between availability of AAC blocks and business opportunities. Major hurdle stopping construction industry from completely switching to AAC blocks is availability. As of now there are only couple of AAC factories in Gujarat. Their total production capacity is around 2000 m3/day while current requirement stands at 2800-3000 m3/day. Out of total production, a chunk of total production is dispatched to Maharashtra.
Most of AAC blocks factories are located around Surat in Southern Gujarat. High price of AAC blocks is due to inclusion of transportation cost which forms around 15-20% of the total cost. Entrepreneurs should really think hard about setting up AAC blocks factories. In addition to relatively lower investment, profit margins are really high with sizable volume. Moreover as awareness about AAC grows, more and more companies will start using AAC blocks for construction. Secondly, there is no dearth of major thermal power plants in Gujarat to ensure steady supply of fly ash – main material for manufacturing AAC blocks. Area between Ahmedabad and Baroda would be really good considering logistics and availability of fly ash, water and other resources.
I am already in talks with people who have experience working with AAC industry and intend to set up a resource pool that might prove useful to those who want to set up AAC blocks factories.