Builders, construction magnates and the underdog - with Vijay Bhaskar, MD, ECO-CARE
When someone says manufacturing or construction, you think ‘business giants’ not ‘startups’. Where technology is an open battle field to enter & win, manufacturing is a like a fort whose entry is guarded by uncharitable industry giants. Very few people try and enter this territory and even fewer try to challenge the prevailing approach of the established players.
Vijay Bhaskar Suryadevara is trying to make his mark in the construction products industry with ECO-CARE Building Products (P) Ltd. which manufactures AAC (Autoclaved Aerated Concrete) Blocks which are an alternative to the conventional mud brick or the red brick used for construction of buildings. Vijay shares his story of is journey from a small village in Krishna district of Andhra Pradesh to the board rooms of builders convincing them to opt for an environment friendly alternative for construction materials.
Vijay completed his schooling in his hometown and pursued his engineering from NIT Calicut in Electronics and Communication. After completing his graduation in 2004, he worked in IT sector for four years. He tried keeping himself engaged and like his work but he never felt at ease working in IT. He joined ISB to do his MBA and get closer to the world of business management but getting a job was never his aim.
“My parents were shocked when I opted out of the placement process at ISB. They have seen pictures and articles in newspapers of people passing out of the institution and getting fat pay cheques and glorious jobs. It was a surprise for them that I wasn’t going for that,” shares Vijay. He wanted to be an entrepreneur and he analyzed different businesses which he could pursue. He chose to start the business of AAC Blocks primarily due to the increased sensitivity towards environment friendly products and changing perception of the people in the construction industry towards them as well. Vijay was seeing a high potential in his idea and the markets were validating it. He says, “almost 40% of all constructions in UK and 60% in Germany are using AAC blocks now and the market in India is surely booming too.”
To set up the manufacturing unit and start operations for ECO-CARE, Vijay started selling the potential of his idea and raised some initial angel capital, some money from friends and family and knocked the doors of banks for the rest substantial amount he needed. Setting up the manufacturing unit in late 2010, he started spending more and more time and resources on his quest to gain customers.
A product that can sell for itself
Vijay hasn’t had it easy and quick when it comes to gaining customers and he believes that he is able to sell in the market of established players only because his product speaks for itself and he has got the value proposition right for the clients. “We are catering to an industry which is in existence from ages, we are offering a replacement, a better replacement,” says Vijay.
The environmental benefits of AAC blocks are something that made Vijay start up in the first place. The process of manufacturing of AAC Blocks is highly energy efficient and emits just 6 to 7 % of carbon dioxide as compared to the manufacturing process of red bricks for producing equal volume of material. Vijay tells us that due to the positive impact on the environment, their project has been approved by UNFCC (United Nations Framework for Climate Change) too.
Manufacturing of red brick is very polluting and not very scientific which makes it almost impossible to maintain the dimensional sanctity of the red bricks leading to a lot of wastage. AAC blocks are manufactured with correct dimensions of the building structures in mind and hence the dimensional sanctity is maintained very accurately leading to no wastage. Adding on the advantages of using AAC blocks in place of conventional construction materials, he shares that they are light weighted and hence allow more use of steel in the construction leading to stronger structures. They have better sound insulation and better thermal conductivity leading to saving a lot on the HVAC (Heating, Ventilation and Air Conditioning) load. In a dry country like India, the savings in electricity bill because of air conditioning can be significant. AAC Blocks are generally bigger in size compared to red bricks which increases the speed of construction resulting in quicker revenue realization for builders.Builders, construction magnates and the underdog
Vijay says, “We are in an industry where we are too small for our competitors who are the likes of Birla’s Ultratech or Avantha Group. We are the underdogs.” Being a small startup is what Vijay takes to his advantage. “I always tell my clients that they can call me even at 2am and I will come running to solve any issue they have. I have to do this and because I have a small startup, I have the capacity to do this.”
As the industry was predominantly unorganized, it was not easy for ECO-CARE to make head way initially. Each builder or contractor had his set of people and suppliers with whom they have been doing business for decades. Making headway in such a set up was very difficult. At the same time, the need and benefits of building and maintaining personal association proved out to be helpful for Vijay -“Once we start the relationship and if we maintain good services, it is not easy for our competitors also to take the business from us. I mean, there is some kind of stickiness in this industry.”
They follow two pronged approach for marketing. On one hand, they have marketing staff to figure out the requirements of the construction companies, quote to the companies and serve these customers – the traditional way. On the other hand, they have a team to educate builders, contractors, architects about the product. Architects and structural designers play a key role in this industry. “Like a patient uses the medicine suggested by a doctor, a builder or contractor always prefers to use the material recommended by the architect,” says Vijay.
Currently ECO-CARE has 15+ clients most of which are in Andhra Pradesh and the company is now sustainable. Vijay is planning on expanding to Karnataka and other south India regions very soon too. He signs off saying, “A level of accountability and maintaining quality of services and relationships are needed for growth and as long as we maintain it, we will surely grow.”