Ravi Chandran,
Proprietor, Ravi Cements
ICR is constantly in touch with cement dealers, who are the crucial, connecting link between the manufacturer and the consumer. Dealers know the pulse of market, beat by beat. So we asked them how their business was going and what were the problems they were beset with. Here is their response, in their voice.
We have been dealing in cement for the last 30 years. We supply cement in wholesale as well as to small retailers in Bangalore region. In the last few years the demand for cement has gone down drastically. One of the reasons is that now there are fewer small builders in the market. Builders have become organised and are now sourcing cement directly from the manufacturer. Plus the realty market too is not picking up, which is further reducing the demand. Now the builders are planning to stop cement purchase till the rate comes down. But I wonder if the price hike is really that high. Cement was being sold at these rates till a few years ago. It was only during the slowdown in the economy and in desperation to beat the competition, had the cement manufacturers slashed the prices. Prices were down to Rs 220-230 back then. Now the cement companies are only coming back to the original numbers.
There is no actual price hike as such. If you look at cement prices for last 5 years or so, you will know that the cement prices have remained stable. But what about the property prices? They have sky-rocketed in that period. Builders have increased property rates significantly. There is no control on that. But they (builders) want to put a cap on cement price. Everything from diesel, to labour has become costly, so why should cement companies not be allowed to raise prices to factor these costs?