Construction Week India – July 2019

CEMENT

CONSTRUCTION WEEK JULY 2019 55

to continue for a while.”

Justifying the rise in prices, Ujjwal Batria, COO, Dalmia Ce-

ment (Bharat), says, “There are various factors that go into

the pricing of product such as taxes, cost of transportation,

raw material cost and other indirect expenses. The rate of

should help sustain cement prices within a favourable range.

THAT’S THE WAY THE COOKIE CRUMBLES
However, for some time now, cement prices have been on the
rise. This has not found favour with real estate developers
who are already reeling under rising inventory and increas-
ing cost of construction. India is currently focused on infra-
structural development and 100 smart cities to aid economic
growth. These development measures and government
initiatives like Housing for All are the reasons for increase
in construction activities leading to rise in cement demand.
There are two primary reasons for the rising price of cement:
growing real estate demand and logistical factors which af-
fect supply. “When the prices of pet coke, freight and fuel are
higher, the same is passed on to cement prices. Apart from
these factors, what contributes to the increase in demand
and price of the cement is the low threat from substitutes,”
says Samyak Jain, director, Siddha Group.
Rohit Poddar, MD, Poddar Housing and Development, be-
lieves that there is no economical or fundamental reason for
the rise in cement prices and it is a result of cartelisation by
cement companies. “In fact, demand has slowed down but
prices continue to remain high because of the aggressive
capacity utilisation of companies to moderate the effects of
price hike in future,” he adds.
According to popular opinion, cement price hikes have
been more pronounced in the South. According to Ashok Mo-
hanani, chairman, EKTA World, “The bigger cities of South are
where the cement price hike is most noticeable. For example,
in the last few months to March 2019, the price of cement
soared by Rs 77 per bag in Hyderabad, Rs 62 per bag in Chen-
nai and Rs 52 per bag in Bengaluru. This price hike has been
determined by a diversity of reasons. Price rises in metro cit-
ies are due to moderate growth in demand, this is an indica-
tion that margins are not healthy, and one can anticipate this

WE USE AUTOMATION

FOR PROCUREMENT.

THIS MANAGES

ANALYSIS OF INCOMING

DATA SUCH AS PRICE VOLATILITY.

RAKESH REDDY

PRICES RISE DUE TO

DEMAND PULL. FOR US,

PRICES HAVE FALLEN IN

FY19 BETWEEN 2.5 AND

4.5% ON A Y-O-Y BASIS.

UJJWAL BATRIA

OPC is used to make almost all concrete due to its strength and durability factors.