HEAD: HIL: HIgh on growth, Low on carbon

BLURB: The company is a perfect example of how being environmentally friendly not only works wonders for the world around you but makes for a healthier balance sheet too

BLURB: HIL’s AAC Blocks Golan Project makes it eligible for about 35,000 – 40,000 Carbon Credits (Certified Emissions Reductions - CERs) per annum, with each CER unit equal to a reduction of one tonne of carbon dioxide equivalent

According to the Indian Green Building Council (IGBC), “A green building is one which uses less water, optimises energy efficiency, conserves natural resources, generates less waste and provides healthier space for occupants, as compared to a conventional building.” However, there is also the aspect of using more environmentally-friendly building material during the construction process – an aspect that a company such as HIL Limited has understood and capitalised on.

A flagship company of the C.K.Birla Group, HIL has a rich legacy of developing brands that have stood the test of time. A comprehensive product portfolio under its sheeting brand: “CHARMINAR” which includes Fiber Cement sheets, Metal Roofing sheet, Polycarbonate sheets (Skylight), Flex-o-boards, thermal insulation products for industries under its “HYSIL” brand and a series of green building products under its “AEROCON” brand which includes Blocks, Panels, C-boards, Ceiling tiles, Planks, Techktona all testify to HIL’s legacy as the market leader in the building materials industry.

Experts in the field of environmental science feel this is the right path to tread. For, with increasing industrialisation and growth of the economy, there is no stopping the infrastructure sector. After all, the sector is not called the backbone of the economy for nothing. However, with this progress and development comes carbon footprints, an adverse impact on the environment and a drain on natural resources.

The key, thus, is to find the balance. And the answers are coming, slowly but steadily. Take the GRIHA grading system, for instance, which has been developed by the Ministry of New and Renewable Energy, in association with The Energy and Resources Institute (TERI). The system rates a building from one to five, with five being given to the most energy-efficient green buildings.

Going green

Not only this, general awareness and enthusiasm for green buildings has increased in the past decade or so. And it is this awareness that HIL wants to work towards. With an extensive distribution network of 2500 stockists and 6,000 retailers, the company’s products are available even in remote area. At the same time, the focus of the company has now shifted from being a mere manufacturer of products to a “360 degree building solution provider”, making it a one-stop shop of its customers.

As a responsible and conscientious business house, the company has chalked out a “5 WAY GREEN” strategy to contribute towards sustainable development. Under the strategy, the company manufactures recyclable and reusable green products; there is no by-product and no pollution during the manufacturing process. Also, it is worth mentioning that the usage of its products leads to energy savings for the consumer.

HIL has gone one step further and has captive consumption of wind energy. The company has set up a wind energy power project of 3.6 MW in Gujarat, and a 1.25 MW project in Tamil Nadu. Overall, the company uses one-third of its power by way of wind energy. The company is further planning more wind projects in these two states as well as in Rajasthan and wants to achieve a target of 30 MW capacity in the next three years.

Walking the talk

Testimony to the company’s commitment to being a truly green organisation are the two CDM (Clean Development Mechanism) projects claiming carbon credits (CERs),which have been registered with the United Nations Framework Convention on Climate Change (UNFCCC). Of these, one is the AAC Blocks Golan Project, which makes HIL eligible for about 35,000 – 40,000 CER's per annum, with each CER unit equal to a reduction of one tonne of carbon dioxide equivalent. The other project is a 3.60MW Wind power project by HIL at Gujarat, India which would make the company eligible for about 11,000-12,000 CERs per annum. The revenue potential for these projects put together based on the current low CER rate of 2.5 euro would still be over ₹70 lakh per annum.

The company realises that green building technology is a futuristic idea for the planet and is pro-life. Generally the cost difference while raising a green building is approximately between 5 per cent and 8 per cent more than a conventional building and the investor recovers costs within three years. Thus, not only do green buildings consume less energy to build but also reduce running costs of buildings up to 35 per cent to 40 per cent.

The Aerocon advantage

Usage of Aerocon products not only enables energy savings of up to 28 per cent and structural savings by up to 20 per cent, but also helps a building in getting “Green certification” and LEED points from leading agencies such as IGBC and GRIHA.Shortage of materials such as sand, water, labour and the paucity of skilled labour are some of the problems faced by a builder. HIL’s products address these issues as they enable reduced work on site and economy in terms of time and cost.

Work can be carried out off site, too. These products are environment friendly and have garnered a lot of attention from the building community in the past few years.

Sustainable too

The company’s change in strategy of being a “360 degree building solution provider” and going green has paid off and shows in the balance sheets too. In the last four years, the company’s CAPEX on energy saving initiatives was to the tune of ₹70 crore, out of which ₹ 45 crore has been made on wind energy.The company’s Gross Revenue (CAGR 15 per cent) as well as Net Worth(CAGR 20 per cent) has only increased over the past five years.

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2011

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523

664

756802

949Gross Revenue (Rs. in Crore)

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146181

257293

338

Net Worth (Rs. in Crore)

HIL and innovation

But the company has no time to sit on its laurels. It is constantly endeavouring to better its products and for doing the same, it invests about 1 per cent of the turnover in research and development (R&D).

With one the largest R&D laboratories, HIL is one of the few building material companies that has two in-house R&D centres, in Hyderabad and Faridabad, set up as long ago as 1964. The awards from many institutions and the 22 patents it holds in India and

other countries like the US, UK, Australia, Malaysia , Sri Lanka and Pakistan are testimonies for HIL’s motive and goal towards green innovation.

Future Plans

More than doubling the current turnover of Rs. 860 crore in four years is the target, Mr. Abhaya Shankar, Managing Director, HIL Limited, has set for himself and his team. “We should cross a gross of Rs. 2000 crore by 2016,” he says. “A comprehensive product portfolio and a series of green building new products continue to propel our growth.” “This is aided by increasing geographical presence, mix of manufacturing and outsourcing and thrust on trade partner support initiatives and possible acquisitions.”

The big plan in achieving the 2016 target is to take revenue from green building products, says Mr. Atul Kapur, Vice President, Sales & Marketing. “We are looking at export markets seriously and have already started market seeding.”

Another important ingredient of Shankar’s innovation is people practices, for which the company has launched a series of initiatives. “We aim to create world-class home-grown leaders across all levels,”