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Blockmaker eyes savings on logistics

Renaatus Procon, part of the RPP Group, is investing ₹50 crore to set up a plant at Tirunelveli to produce AAC (Autoclaved Aerated Concrete) blocks.

Chairman and managing director of the group, R.P. Selvasundaram, and CEO of Renaatus Procon G. Suresh Kumar told the media that RPP started a plant near Chennai in 2011 to make AAC blocks consisting of fly ash and cement.

These blocks are used largely in high-rise buildings and infrastructure projects.

The Tirunelveli plant will be operational by 2019. The firm’s main markets for its Renacon brand are Tamil Nadu, Kerala, and Karnataka. The total capacity of the two plants is 3 lakh cubic meters a year. As a logistics account for 25-30% of the product cost, Renaatus plans to have regional plants. “By 2022, we want to set up a plant in another State,” Mr. Kumar said.

The country has about 100 plants making AAC blocks and the market is growing 15% annually.

Chemicals tie-up

Another focus area for Renaatus is construction chemicals. It draws inputs for the business from a German firm and is now exploring a technical tie-up.

The group’s interests span construction projects, M-Sand, ready-mix concrete, and AAC blocks. Its annual turnover is ₹350 crore and its target is ₹600 crore by 2020.