Economy & Market

Prices remain unchanged despite demand upswing

Published

8 years ago

January 12, 2018

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With cement industry growing over 13 per cent in H1FY19, capacity utilisation is picking up pace. But price hikes are still in wait.

After an upward spiral for two months – September and October – by 6.01 per cent and hitting the lifetime peak of 2054.7 points, ET Cement Index, that tracks cement price movements in the country, has hit a pause in November. Though rising cost of inputs have continued to put pressure on the industry bottom lines, cement majors are said to have preferred to boost volumes instead of hiking prices in November, even as strong demand streak continued.

The industry players last hiked prices in the last week of October, boosting the index by 3.18 per cent for that month. In October, the total cement production had hit 28.37 MT posting a growth of 18.4 per cent, which was highest in six months, according to the latest Core Sector Data Analysis by CARE Ratings. ‘The favourable base effect (-1.3 per cent growth in October 2017) along with election-led infra push, buoyant rural markets, which led to rural housing construction, boosted the demand for cement,’ CARE Ratings said. The Core Sector (including sectors like coal, electricity, fertilisers, mining and steel) posted a growth of 4.8 per cent during the month, with an impetus coming from power, mining and cement – all growing by more than 10 per cent.

‘Cement industry (production) witnessed robust growth of 14.4 per cent during first half of 2018-19 (H1FY19) after having witnessed revival during FY18 backed by Government spending on infrastructure,’ Madan Sabnavis of CARE Ratings said in an industry update on H1FY19.

During the H1FY19, stable construction activity in residential real estate, increased demand from affordable housing and robust demand from infrastructure segment have ensured cement capacity utilisation improves to 70 per cent,? CARE Ratings added in the report. Though there was an expectation that the prices would rise after Diwali festivities, it was not to be.

Q2 indicators
The recently released July-September results by cement companies have thrown up certain trends – though the prices have seen some rise in September and October months input costs were running ahead of realisations of cement companies highlighting the challenge of the necessity of prices catching up in the near future.

Sharp rise in pet coke and fuel costs, a depreciating rupee and muted pricing power in a competitive market are the factors that lead to the challenge. These factors also continue to keep profitability of most of the industry players under check.

Pet coke used to be cheaper than coal, and that was the reason why cement companies were using more of pet coke than coal in order to bring down the cost of production. However, the situation has reversed now forcing the cement manufacturers to change their product mix frequently. While the landed cost of pet coke is at Rs 12,000 per tonne, coal is costing Rs 5,600/tonne, making a lot of difference in the cost of manufacture of cement.

However, the only solace is that volumes are rising across the regions, which is expected to give cement players the much needed pricing power in the coming months so that they can cover their costs more comfortably. The demand strength was reflected in the near double digit growth rates posted by most of the cement companies in H1FY19.

To cite an example, Shree Cement reported 21 per cent rise in revenue to Rs 2,587 crore backed by strong market demand in the eastern region, and higher prices in the northern markets. While it has witnessed 16 per cent growth in volumes in the east, higher prices in the northern region have aided its realisations by 4 per cent quarter-on-quarter and 2 per cent on a year-on-year basis.

Heidelberg Cement achieved 14 per cent revenue growth with only 6 per cent rise in volumes, mostly based on higher realisations from the central region where the company sells about 90-95 per cent of its cement.

Industry majors predict that the momentum will continue in H2 as well and expects a volume growth of 8-10 per cent in FY19. The major threat for volume growth is the liquidity squeeze that may affect the progress of projects in infrastructure and housing segments.

Double-digit growth
‘We are expecting a high double-digit growth this year,’ said Shailendra Chouksey, President, Cement Manufacturers Association (CMA) at a conference in November. That is the industry will see double-digit growth after eight years, primarily led by the government’s increased spending on big infrastructure projects. These expectations are also based on 13 per cent growth witnessed by the industry in the H1FY19.

The industry with around 60 players has an installed capacity of around 470 Million Tonnes of which 70 per cent of the capacity is being utilised. Thus, capacity utilisation, which was a big challenge for the manufacturers till recently is being tamed to a great extent with major companies, which have acquired existing capacities in the last couple of years, are focusing on improving capacity utilisation rather than resorting to price hikes. Industry leaders like UltraTech Cement, Ambuja Cements and Dalmia Bharat are continuing to operate at 70-75 per cent capacity utilisation, above of the industry average.

The recent state level elections in the northern and central regions have driven implementation of a lot of infrastructure projects, thus raising demend. With general elections in the country a few months away government-funded infrastructure projects will remain the main consumers of cement, besides affordable housing which has gained momentum over the last two years. Given the above scenario, will the industry traversing through a challenging landscape can see an upward cycle coming its way in the near future? Various factors that could influence positive outcomes in the sector seem to be falling in place.

– B.S. SRINIVASALU REDDY

Concrete

Cement Makers Reaffirm Commitment to Sustainable Growth

Published

2 weeks ago

June 5, 2026

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World Environment Day spotlight on innovation and circularity

On World Environment Day, the Indian cement industry reiterated its commitment to supporting India’s climate ambitions through sustainable manufacturing, resource efficiency and the adoption of cleaner technologies.

The Cement Manufacturers’ Association (CMA) said the sector remains aligned with the Government of India’s Net Zero commitments and is accelerating efforts to reduce its environmental footprint while supporting the country’s infrastructure and development agenda.

Parth Jindal, President, CMA and Managing Director, JSW Cement, said the industry is increasingly adopting cleaner technologies, improving energy efficiency and expanding the use of alternative fuels and raw materials. He also highlighted the growing importance of circular economy practices, where industrial by-products and waste streams from one sector are utilised as resources in another.

“The Indian Cement Industry is aligned to the Government’s commitments on carbon mitigation and is accelerating the adoption of cleaner technologies, resource efficiency and circular economy practices while actively exploring the potential of Carbon Capture, Utilisation and Storage (CCUS) as a critical pathway for deep decarbonisation,” said Jindal.

He added that coprocessing industrial waste and by-products helps conserve natural resources, reduce disposal requirements and lower the environmental footprint across multiple sectors.

According to Jindal, sustainability is no longer limited to manufacturing processes but is increasingly influencing investment decisions, innovation strategies and long-term growth plans within the industry.

Echoing similar views, Dr Raghavpat Singhania, Vice President, CMA and Managing Director, JK Cement, said sustainable development extends beyond emissions reduction and must also focus on responsible resource utilisation and waste minimisation.

“Sustainability in the built environment cannot be measured by emissions alone. It is equally about how efficiently we use resources, how effectively we minimise waste and how responsibly we create the infrastructure that will serve future generations,” said Singhania.

He noted that the cement industry is advancing its sustainability agenda through greater resource efficiency, increased circularity, technological innovation and continuous improvements in manufacturing practices. As a key contributor to India’s infrastructure development, the sector has a critical role to play in balancing economic growth with environmental responsibility.

On the occasion of World Environment Day, industry leaders reaffirmed their commitment to supporting India’s climate goals while delivering the materials required for resilient, durable and sustainable infrastructure.

Concrete

Building a Greener Future Together

Published

2 weeks ago

June 4, 2026

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Environmental sustainability requires immediate action, not just long-term commitments and discussions. Recycling, circular economy practices, and technology-driven waste management can help industries reduce environmental impact while supporting sustainable growth.

Author: Jignesh Kundaria, Director and CEO, Fornnax Technology

World Environment Day serves as an important reminder that environmental sustainability can no longer remain confined to discussions, reports, or long-term commitments. The environmental challenges facing the world today demand immediate, measurable, and collective action. Across industries and communities, waste generation continues to outpace our ability to process it responsibly, placing increasing pressure on ecosystems, natural resources, public health, and the well-being of future generations.

One of the most significant shifts required today is a change in how society perceives waste. Rather than being viewed as a material to be discarded, waste must be recognised as a valuable resource that can contribute to both economic growth and environmental protection when managed through the right technologies and systems. This mindset forms the foundation of the circular economy model that countries across the world are increasingly adopting to reduce landfill dependence, recover valuable materials, and create more sustainable industrial ecosystems.

India has made meaningful progress in strengthening awareness around sustainability, recycling, and environmental responsibility over the past decade. Significant efforts are being made to formalise the recycling sector through improved infrastructure, technology adoption, policy implementation, and broader stakeholder participation. These developments are creating a stronger foundation for responsible waste management and resource recovery across the country.

However, achieving long-term environmental impact requires collaboration from all stakeholders. Industries, policymakers, technology providers, and communities must work together with greater accountability to strengthen recycling ecosystems, encourage responsible waste management practices, and create sustainable outcomes through consistent execution rather than temporary interventions.

As someone closely associated with the recycling industry, I firmly believe that technology will play a decisive role in addressing future environmental challenges. Advanced recycling systems have the potential to recover valuable resources, reduce pollution, minimise landfill burdens, and conserve energy, creating a more sustainable future for generations to come. This belief is deeply reflected in Fornnax’s motto, “Committed to Create a Green Future,” which embodies our commitment to building long-term environmental value through innovation and responsible action.

At the same time, technology alone cannot deliver meaningful change. Real progress requires intent, awareness, participation, and a shared sense of responsibility. Sustainable development can only be achieved when innovation is supported by collective action and a genuine commitment to environmental stewardship.

On this World Environment Day, let us move beyond conversations and take meaningful steps towards creating a cleaner, greener, and more sustainable planet. By embracing innovation, strengthening recycling ecosystems, and acting responsibly today, we can create lasting environmental impact and secure a better future for generations to come.

Concrete

Dalmia Bharat Acquires Jaiprakash Associates Cement Assets for ₹2,850 Crore

Published

4 weeks ago

May 25, 2026

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Dalmia Cement executed a Business Transfer Agreement with Jaiprakash Associates and Adani Infra, to acquire 5.2 MnTPA of cement capacity across Madhya Pradesh and Uttar Pradesh.

Dalmia Cement (Bharat) announced on May 22, 2026 that it had signed a Business Transfer Agreement with Jaiprakash Associates Limited and Adani Infra (India) Limited for the acquisition of cement plants located at Rewa in Madhya Pradesh and Churk, Chunar and Sadwa in Uttar Pradesh. The deal was struck at an enterprise value of ₹2,850 crore and is expected to close within two weeks of execution.

The acquired assets from Jaiprakash Associates include 5.2 MnTPA of cement capacity and 3.3 MnTPA of clinker capacity. The package also covers 99 MW of thermal power capacity and railway sidings at Rewa, Chunar, and a common siding at Churk. This infrastructure gives the acquisition immediate operational utility beyond just production tonnage.

The transaction has a long backstory. Dalmia Cement had originally entered into a framework agreement with Jaiprakash Associates in December 2022, covering the sale of these business assets along with a long-term clinker supply arrangement. However, before the deal could be completed, Jaiprakash Associates was admitted to insolvency proceedings under the Insolvency and Bankruptcy Code. The earlier agreements could not be consummated as a result.

In an official statement, Puneet Dalmia, Managing Director & CEO, Dalmia Bharat, said, “I am very excited about addition of these assets in our portfolio. This serves as a great strategic fit for Dalmia. It helps us move forward in our journey to be a pan India player and provide a strong head start to serve the high potential markets in Central region. I am optimistic that the expansion potential of these assets along with close proximity with Dalmia’s captive mines will help us create a capacity hub for the future”.

Following the approval of Adani Group’s resolution plan for Jaiprakash Associates under the IBC framework, Dalmia approached the new management to revive discussions. The fresh Business Transfer Agreement was executed to settle all pending disputes, legal proceedings, and arbitration matters arising from the original framework agreement with Jaiprakash Associates.

Expanding market reach

Dalmia added, “Our familiarity with these assets under the earlier tolling arrangement gives us a deep understanding of the facilities and helps us establish strong connect with channel partners and vendors. We believe that this will help us in faster ramp up of capacities and quicker inroads into the market. As we look forward, I am very confident that we will be able to leverage the strengths of Dalmia to operate these assets in a manner where we can maximise value creation for all our stakeholders.”

With the addition of these plants, Dalmia Bharat’s total installed cement capacity will rise to 54.7 MnTPA upon consummation. The company has further expansion projects underway at Belgaum, Pune, and Kadapa, which are expected to take overall capacity to 66.7 MnTPA by Q2 to Q3 FY28.

The Central India location of the Jaiprakash Associates plants gives Dalmia Bharat faster access to markets in Madhya Pradesh and Uttar Pradesh than a greenfield build would have allowed. The company also cited debottlenecking and brownfield expansion as near-term opportunities at the acquired sites. Dalmia Bharat said the assets were expected to contribute positively to EBITDA and overall returns, given the pricing environment in the region and the company’s cost structure.