Lafarge global CEO Bruno Lafont bets on India, backed by new study

India will become the world’s third largest construction market by 2025, adding 11.5 million homes a year to become a $1 trillion a year market, finds a new study by Global construction perspectives and Oxford Economics. Speaking to ET, Bruno Lafont, chairman and CEO of international cement major Lafarge said that this benchmark study reinforces why Lafarge finds India attractive, even though the study has reduced India’s short term growth prospects. “The attractive growth of the construction industry will be higher than the short term economic growth. India is one of our focus countries, as we want to expand our operations from the North East to the rest of the country,” said Mr Lafont.

Mr Lafont is not one of those international investors who are put off by the slowdown in India. “Lafarge is present in 65 countries. There is no easy country to work in. The path that the Indian authorities is taking is working; we are happy in India,” he says. However, he does point out that what Lafarge would like to see in India is a “simplification of the framework of regulations so projects can move faster,” clarifying that this is not a unique Indian problem, it is also the problem with many European countries.

Mr Lafont points out that Lafarge opened a research laboratory in India to promote innovations “that are closer to the market, even for traditional methods of construction.” His focus is going to be on India’s booming Tier 2 cities, and not just in any one region.

The GCP study also predicts that while India’s infrastructure market is expected to grow at around 8%, the fastest among its sector, India is unlikely to achieve its plan target of $1 trillion investment in infrastructure, given the shortage of financing. However, while factors like high commodity prices, inflation and currency volatility affect its short term growth prospects, the writers feel that in the medium to long term, once global financial volatility passes, India is poised for a construction boom.