Introduction:

India is racing to build future cities and it is crystal clear that the materials that hold the skyscrapers, tunnels, and railways are as crucial as the blueprints that design them. When you see beneath the layers of concrete walls and steel beams, there lies an unsung industry that silently fuels the country’s progress: construction chemicals. The update in the industry about the acquisition of Buildtech Products India by energy and environmental giant Thermax, has turned the spotlight toward the often-overlooked essential sector. In this article, we have discussed this strategic move and underscored the powerful trend as it transforms not only infrastructure but also real estate, transportation, and sustainability efforts across the nation. This article is going to be an interesting quick read as we have explored the news in detail and its indirect impact on other sectors. Let’s begin. 

Thermax Ltd. strengthening its position in the construction chemicals sector:

The construction chemicals sector is often overlooked but considered one of the most crucial sectors that help the country progress. Thermax Ltd. has strengthened its position through its strategic acquisition of Buildtech Products India Pvt. Ltd. for approximately INR 72 crores. This acquisition allows Thermax, a leading energy and environmental solutions company to strengthen its foothold in the sector thereby tapping the nation’s infrastructure landscape. 

Buildtech was established in 1995 and has developed a niche with its products including admixtures, accelerators, and specialized construction capsules. These materials are used in major infrastructure projects such as tunnels and railway developments. 

Indian construction chemicals market is currently valued at USD 3.76 billion and is expected to grow at a CAGR of 5.64% reaching USD 5.17 billion by 2030. This growth aligns with Thermax’s focus on chemicals as an investment area. The expertise of Buildtech in civil repairs, waterproofing, plumbing, and painting solutions adds depth to Thermax’s product offerings. 

Furthermore, the aim of Thermax through this acquisition is to capitalize on Buildtech’s established market niche and thereby expand its reach within the competitive construction chemicals industry. 

Regarding the acquisition, Ashish Bhandari, Thermax’s MD and CEO emphasized that the acquisition underscores Thermax’s commitment to enhance the country’s infrastructure development with advanced solutions for the construction industry. 

How does this acquisition might affect other sectors in India?

Real estate industry and construction:

The construction industry has a huge demand for high-quality, cost-efficient materials for large and multi-storied structures. With evolving trends in the construction industry, clients are demanding long-lasting buildings that reduce long-term maintenance costs and expertise in waterproofing, plumbing and civil repairs. Buildtech’s expertise in these categories is pushing the real estate industry towards sustainable construction practices and eco-friendly solutions. Therefore the country is inched towards involving advanced and ecofriendly solutions and reinforcing the green building standards.

Railways and transport: 

Buildtech’s product line includes accelerators and admixtures that are meant for railway infrastructure and this acquisition is expected to improve the durability of India’s railway network and the adaptation of the advanced chemicals could lead to safer and more reliable rail systems. Therefore, the acquisition can greatly impact the nation’s goal of expanding rail connectivity. 

Quality construction chemicals are the key to the complex construction of transport projects. This enables faster completion times and boosts the nations’ connectivity goals. Access to quality construction chemicals is expected to foster efforts towards reaching the connectivity goals. 

Chemical manufacturing:

Chemical companies are expected to follow the path of innovation and be encouraged to experiment and come up with high-value construction chemicals or specialty products. The acquisition highlights the importance of specialty chemicals and Thermax’s increased presence may lead to further investment in R&D within the chemical industry. 

The acquisition also encourages major players to acquire and invest in specialty chemical firms consolidate within the sector with the larger companies and seek similar expansions to live up to the demand and keep up with Thermax’s broader chemical offerings.

Waterproofing and Civil maintenance services:

Waterproofing and civil repair companies may also benefit from Thermax’s materials that are advanced, cost-efficient and durable. This helps them scale up their offerings for both residential and commercial projects. 

The incorporation of specialized products into Thermax’s line could encourage other companies to adopt higher standards and innovate products. This led to overall improvements in waterproofing and maintenance across the sector. 

Focus on environmental and sustainability initiatives:

Thermax is focusing on sustainability and the acquisition is expected to drive the innovation in creating low-impact and environmentally friendly chemicals. This enables them to potentially enhance sustainable practices across the sectors and reduce the carbon footprint that is linked with large-scale construction.

Some construction chemicals can be environmentally taxing, but Thermax’s advanced materials are promoting greener practices, benefiting the industries working in line with the country’s environmental goals. 

Next major investment of Thermax:

Thermax is aiming to boost its green hydrogen production with its new electrolyzer plant by setting up a solid oxide electrolyzer manufacturing plant in India. Thermax Ltd. is positioning itself at the forefront of India’s green energy transformation with plans to establish a manufacturing plant for solid oxide electrolyzers. This technology is crucial for the production of green hydrogen. 

For this strategic move, Thermax has partnered with UK-based Ceres Power Ltd. focusing on advancing solid oxide electrolysis cell (SOEC) technology. This technology is known for its high efficiency in converting renewable energy into green hydrogen. 

The collaboration allows Thermax to manufacture, distribute and service SOEC stack array modules using Ceres’ technology to bring the solution to India. We term hydrogen production green when the electrical energy used for the production process is obtained from renewable sources. Otherwise, the hydrogen is termed “Grey” or “blue” hydrogen as the energy obtained for the production process is from fossil fuels. 

The SOEC technology is where the process operates at a much higher temperature say (700-1000°C) and has greater efficiency for green hydrogen production. This technology is highly efficient for industrial applications. 

Since the SOEC works at high temperatures, this reduces the amount of electrical energy that is needed to split the water molecules. Since the temperature is higher than usual, the process involves more energy supplied as heat rather than electricity, making the process more energy efficient. 

Furthermore, the technology utilizes the concept of thermal integration. As the process involves high temperatures, SOEC technology can be integrated with other industrial processes that produce excess heat, thereby making them ideal for sectors such as steel, cement and chemical manufacturing. 

The integration helps in the reduction of energy costs and makes it cost-effective in the long term. 

SOEC technology is considered more efficient than AEC and PEM because of high temperature and low electricity input. It also produces large amounts of hydrogen making it more suitable for industrial-scale operations. When this technology is integrated with renewable energy sources, it can produce hydrogen with minimal carbon footprint. 

Thermax’s CEO Ashish Bhandari, emphasized the scale of commitment required to get prepared for such a project its commitment towards investing hundreds of crores and its adjustment in funding as the project advances. The plan also includes developing a robust supply chain, localizing key components to reduce the dependency on imports and aligning the vision towards self-reliance in green technologies. 

Mr. Bhandari also emphasized the role of hydrogen that could transform hard-to-decarbonize sectors including steel, petrochemicals, and fertilizers. 

Thermax’s 70% of projects are dedicated to clean energy projects and this expansion into solid oxide electrolyzers is expected to catalyze the country’s hydrogen economy.

Take away:

The construction chemicals sector has received strong signals of a new era rising with the news of Thermax Ltd.'s acquisition of Buildtech products. This is expected to foster innovation across infrastructure, real estate, and transportation. This expansion is likely expected to reach the farthest grounds of waterproofing, civil repairs and specialty chemicals. Overall Thermax is more likely to set a high standard for sustainable construction and change the way India views construction techniques. Furthermore, their latest investment in the solid oxide electrolysis technology for green hydrogen production has reflected their commitment to green energy transition. Together their moves highlight their role as a catalyst in India’s journey towards sustainable infrastructure and a low-carbon future.