IMPACT OF SUPPLY CHAIN DISRUPTIONS ON BUILDING MATERIALS INDUSTRY
The supply chain bottleneck started during the early stages of the pandemic in 2020. Then, buying patterns changed instantly, wherein everyone wanted to own a house or upgrade to bigger homes. The combination of scarce supplies and higher demand led to skyrocketing costs through nearly every link of the steel supply chain. The higher prices aren’t the only ripple effect. Steel supply chain issues are drastically affecting lead times, taking longer to receive the raw materials required for production of TMT Bars.
IMPACT OF RISING RAW MATERIAL PRICES ON REAL ESTATE
In the last one year, the construction cost has gone up by about 35 per cent and the labour cost by almost 25 per cent. In all, construction cost has almost increased by Rs 500 per sq ft. If the project is taken on a joint development basis, the cost to the builder goes up by 800 to 1,000 per sq ft. Further, rising fuel prices had a considerable effect on real estate. Also, as per RERA, developers can't increase the prices of properties after they sign an agreement with the buyer. Hence, the hike in raw material cost will severely dent the viability of the sector.
WHAT ARE THE COMPANY’S FUTURE EXPANSION PLANS?
German TMX has an integrated manufacturing unit for production of its Steel with in-house production of Sponge Iron, Billets & TMX Bars. Currently, German TMX flaunts an annual turnover of 0.36 M tons of TMX Bars, 0.40M tons of Billets and 0.20M tons of Sponge Iron. Recently the capacity of induction furnaces has been increased by 20 MT. Also a 22 MW Captive Power Plant work is under progress and we are hopeful to start its operation by the end of 2022. The company is also planning to set up facilities like epoxy coating and Cut & Bend in near future.
While we work to boost our inventory of raw materials, we encourage our customers to plan orders in advance. As an industry leader for over 50 years, we continue to stand by our customers and provide complete support possible from our end.