Economy & Market

Tier-2 companies taking lead in price hikes

Published

9 years ago

January 11, 2018

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Even as cement majors are dithering from hiking prices with a view to build volumes, their smaller counterparts are hiking prices in order to cover rising input costs.

Positive expectations on the industry prospects returned with some of the industry players breaching the price barrier to an extent riding on the continued demand growth which is to fuelling renewed hopes. Cement prices which have remained stagnant or down during most part of the year, except in May and July, rose about 6 per cent over the last two months – September and October 2018.

After a slide of 5.36 per cent in two months in July and August, ET Cement Index, tracking cement prices across regions in the country, has bounced back in the next two months by gaining 6.01 per cent, touching its peak this year, so far, at 2054.7 points. Rising cost of inputs seems to have pushed the industry to hike prices by 3.18 per cent in October alone. However, we may wait for a couple of months to see if the upward trend is sustainable or not.

Leading ratings firm, India Ratings and Research (Ind-Ra) is expecting that the overall demand conditions will remain stable for the Indian cement manufacturers, considering a gradual economic growth forecast across cement end-markets, with real estate and infrastructure helping sustain volumes. ‘With modest capacity additions of 4.2 mtpa (million tonne per annum) in ongoing fiscal, the utilisation is expected to improve,’ the rating agency added.

‘Tier-2 manufacturers taking price hikes without support from Tier 1 manufacturers suggests that the pricing power is slowly returning to the sector,’ says Vaibhav Agarwal of PhillipCapital India, citing the outcome of ground/channel checks in north India the firm has undertaken in October. Volumes continue to remain strong is what the channel has indicated. The worst on pricing front appears to be over, the question remains how fast can the cement prices improve driven by the fundamental pricing power.

‘Tier 2 manufacturers are making deliberate attempts to take price hikes in the range of Rs 2-3/bag every week and Rs 6-8/bag of price hikes have already happened in north India since 1st October 2018. Adjusting for GST this will mean a price hike of Rs4-6/bag,’ says Agarwal. With this, the price gap between Tier 1 and Tier 2 manufacturers has significantly reduced.

Citing historical experience, Agarwal feels that cement manufacturers have the fundamental ability to see a price CAGR of ~5% in similar scenarios like the current one.

In north India, the ground continues to believe the liquidity issues which has emerged over the last few days is very specific and they have yet not seen any significant reduction in orders. ‘Though they also believe it is early to pass a judgment, prima facie the ground remains confident that there is not yet a real crisis which may impact demand in medium term,’ PhillipCapital says in the report.

But the situation or low liquidity impact is not the same in an organized market like West India, according to the channel checks done by PhillipCapital. In the west, the impact of liquidity crunch is visible, especially with smaller builders who are dependent on NBFC funding. ‘As the NBFC’s have stopped extending credit to these builders the orders from such builders for concrete/ cement etc., have seen a slow down. However, the order book from larger builders continues to remain strong as they have yet not faced any liquidity crunch and are mainly bank funded,’ says the report released in the last week of October.

However, the impact of liquidity crunch is not expected to hit infrastructure projects and the ground sees no concern in the execution and pace of construction of such projects. Few notable projects which the ground believes have the potential of huge cement consumption are: 1) Statue of Shivaji Maharaj, 2) New Sea Links in Mumbai, 3) Coastal road build up, 4) Freight Corridor, 5) Metro Construction and 6) New Mumbai airport. ‘The ground believes these projects are bound to consume material quantities of cement in a couple of quarters from now and will lead and support the demand momentum,’ says Agarwal.

Organised markets such as west India will feel the heat of liquidity crunch more severe than relatively unorganized markets like north India. ‘However, this will remain limited to real estate market and that too to smaller builders. We were not told of any liquidity issues with regards to infrastructure projects, and the outlook of concrete manufacturers who are supplying to such huge ticket infrastructure projects remains fairly positive,’ PhillipCapital says.

In the west, the ground also believes that price hikes in cement is easily possible if the real intent of the cement manufacturers is actually for a price hike. Despite liquidity crunch and lower volume off-takes (then normal), none of the distributor, concrete manufacturers, channel partners believe that cement industry is lacking the pricing power. ‘We were told that some price hikes are already on cards effective 1st November 2018 in Mumbai markets. However, sustainability of these price hikes is the key,’ says Agarwal.

India Ratings said that with a minimum capacity addition in northern region and stable demand, the capacity utilisation will remain constant. Referring to western region, India Ratings believes that the utilisation in the western region is likely to be high on account of speeding up of the Dedicated Freight Corridor Corporation of India Limited (DFCCIL) projects, Mumbai metro rail project, and road and irrigation projects due to the upcoming elections in Maharashtra in September 2019.

India Ratings expects capacity utilisation in the central region will increase over the medium term on account of receding impact of sand mining issues, election season in central region states and improving utilisation level of Jaypee’s assets.

In the east, it sees utilisation moving northward on account of boost in construction activity in Bihar due to sand availability, growth in individual home builders and infrastructure spends.

– B.S. SRINIVASALU REDDY

Concrete

Wonder Cement appoints Mahesh Singh as VP Corporate Brand Communication

Published

4 days ago

October 9, 2026

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Singh brings 20+ years of brand and marketing experience, and will lead integrated corporate brand communication initiatives at Wonder Cement

New Delhi

Wonder Cement, a leading cement manufacturer, has appointed Mahesh Singh as Vice President – Corporate Brand Communication. In his new role, he will oversee corporate brand strategy and communication, including digital and performance marketing, public relations, trade, events, exhibitions, sports and experiential marketing.

Singh brings over two decades of experience across marketing and communications, with roles spanning the automotive industry, agencies and entrepreneurship. He spent more than a decade with Honda Motorcycle & Scooter India, working across integrated communication, media, digital, retail and consumer engagement. His stint also included helping build the company’s digital marketing capabilities.

He moved to dentsu X India as Vice President – Strategy & Planning, working across categories such as automotive, auto components, electric vehicles, FMCG, consumer electronics, BFSI, apparel and brand consulting. His responsibilities included media and marketing strategy, product launches, content, performance marketing and consumer activations.

Singh subsequently took an entrepreneurial route with Radiant Brands before joining Shriram Ltd (SPR Autotech) as Head – Marketing & Communications. There, his remit included brand and corporate strategy, communications, PR and ORM, retail identity, loyalty programmes and events.

At Wonder Cement, Singh will be responsible for bringing together the company’s corporate brand communication initiatives across digital, performance marketing, PR, trade, sports and experiential platforms. The role will focus on creating an integrated approach to communication across consumers, trade partners and other key stakeholders.

The appointment brings to Wonder Cement a marketer whose career has spanned the brand, agency and entrepreneurial sides of the communications ecosystem.

Wonder Cement, part of the RK Group, is a cement manufacturer with roots in Rajasthan and a focus on quality, trust and transparency. The company has grown to six manufacturing plants, and a cement capacity of 21.5 MTPA. With more than 2,000 employees and a network of over 5,000 dealers, its operations span manufacturing, distribution and customer engagement, with a focus on consistent product quality and efficient execution.

Concrete

JSW Cement commissions additional 1 MTPA grinding unit at Nagaur

Published

5 days ago

October 8, 2026

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With this commissioning, JSW Cement’s total cement grinding capacity has increased to 25.10 MTPA,
Mumbai

JSW Cement, one of India’s leading green cement producers and part of the diversified JSW Group, today announced the successful commissioning of an additional 1.00 MTPA cement grinding unit at Nagaur, Rajasthan. The commissioning marks another significant milestone in the Company’s growth strategy.

With this commissioning, JSW Cement’s total cement grinding capacity has increased to 25.10 MTPA, while its total clinker manufacturing capacity, including clinker capacity at its joint venture, JSW Cement FZC, stands at 9.74 MTPA.

JSW Cement had commenced operations in North India in March 2026 with the Nagaur Integrated Plant, comprising a 3.30 MTPA clinkerisation unit and 2.50 MTPA cement grinding unit. With the commissioning of the additional 1.00 MTPA cement grinding unit, the plant’s total cement grinding capacity has increased to 3.50 MTPA, enhancing the company’s ability to cater to the growing cement demand across Rajasthan, Haryana, Punjab and the National Capital Region (NCR). The expansion has been funded through a strategic mix of equity and long-term debt.

During the quarter ended 30th September 2026, JSW Cement has also commissioned the Alternate Fuel Handling System and the Waste Heat Recovery system (WHRS) at the Nagaur Integrated Plant.

Nilesh Narwekar, CEO, JSW Cement, said: “The commissioning of additional 1.00 MTPA grinding capacity at Nagaur is a key strategic priority for us and will accelerate JSW Cement’s expansion into North India. We look forward to servicing the growing needs of the region and contributing to the economic growth of Rajasthan, Haryana, Punjab and the NCR area. I am delighted to share that the company has commissioned this grinding unit within the expected timeline, showcasing our project execution capabilities. Further, the Alternate Fuel Handling System and the Waste Heat Recovery system (WHRS) are expected to substantially reduce our production costs going forward.”

Concrete

UltraTech becomes first Indian cement firm to cross 2 GW green energy

Published

6 days ago

October 7, 2026

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UltraTech Cement has crossed 2 GW of captive green energy capacity, with renewables and waste heat recovery meeting 48 per cent of its power needs.

Mumbai

UltraTech Cement Limited has surpassed 2 GW of installed green energy capacity for captive use, becoming the first cement company in India to achieve the milestone. The Aditya Birla Group company commissioned 116.55 MW of wind capacity at its Inter-State Transmission System-connected wind-solar hybrid project in Barmer, Rajasthan, along with 10 MW of Waste Heat Recovery System capacity at Sarlanagar Cement Works in Karnataka.

With these additions, UltraTech’s cumulative installed green energy capacity has reached 2,024 MW. This includes 1,580 MW of renewable energy capacity and 444 MW of waste heat recovery capacity, together meeting around 48 per cent of the company’s current power requirements.

The company said the milestone reflects the progress of its long-term energy transition strategy. In FY27 so far, nearly one-third of UltraTech’s 76 manufacturing units in India have maintained green energy utilisation above 50 per cent of their electricity requirements, while five units have crossed 95 per cent.

K C Jhanwar, Managing Director, UltraTech Cement Limited, said, “Crossing the 2 GW green energy milestone is the result of a strategy we have pursued consistently over the past decade. Cement is an energy-intensive, hard-to-abate sector, and showing that reliability and growth can go hand in hand with a rapid shift to green energy sets a benchmark for the industry. With nearly half of our power needs now met through green energy, we are significantly less exposed to fossil fuel supply constraints and power price volatility. As we scale up renewables, waste heat recovery and battery storage across our operations, we are building an energy foundation for stable, long-term growth.”

UltraTech commissioned 430 MW of green energy capacity in FY26 and continues to expand its renewable energy and waste heat recovery portfolio.

The company is also progressively integrating Battery Energy Storage Systems across its operations to improve renewable energy utilisation and supply reliability.

In 2025, UltraTech operationalised what it described as India’s first on-site hybrid round-the-clock renewable energy project at Sewagram Cement Works in Gujarat. The project combines solar, wind and battery storage.

As part of its decarbonisation strategy, UltraTech said it has not invested in new captive thermal power capacity for either greenfield projects or brownfield expansions at its integrated units for more than a decade.

The company said its expanding green energy portfolio is helping reduce dependence on conventional grid electricity and fossil fuel-based power, while lowering exposure to fluctuations in coal and electricity prices.

UltraTech aims to increase green energy’s share in its total power mix to 85 per cent by 2030. As a member of RE100, it has also committed to meeting 100 per cent of its electricity requirement through renewable sources by 2050.

UltraTech Cement, the cement flagship of the Aditya Birla Group, has a total grey cement capacity of 210.1 MTPA and white cement and putty capacity of 3.5 MTPA. The company is also a signatory to the GCCA Climate Ambition 2050 and has committed to the GCCA Net Zero Concrete roadmap.