Economy & Market

Late monsoon adds to manufacturers woes

Published

8 years ago

January 7, 2019

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Steep rise in prices over four months’ span have tapered off demand. Further price hikes face challenges like delayed monsoon and allegations of cartelisation of cement manufacturers.

The all India cement prices have eased in June 2019 in line with the expectations of the cement industry value chain last month based on some pressure points developing against the steep rise in prices seen since March 2019. Channel checks suggested that all-India cement prices have declined by 2 per cent month-on-month (m-o-m) to Rs 361/bag in June 2019 versus Rs 368/bag in May, in the first half of the month, though the fall has moderated by month-end.

The fall in prices was predicted by analysts taking cue from falling demand due to higher prices and dealers offering discounts to push their products. With sharp 8 per cent Month-on-Month (MoM or compared to the previous month) hike pan-India in April, average trade prices in April-June were up by 11 per cent Quarter-on-Quarter (QoQ).

The ET Cement Index that tracks cement price movements across the country was down by 1.39 per cent to 2397.3 points by end-June 2019 from 2431.1 points in end-May 2019, ending the four months of rising streak. With the government announcing that it will probe into builders’ allegations of cartelisation of cement manufacturers resulting price rise, the scope price hikes by cement manufacturers has been capped in the months to come. Irregular monsoon is also threatening to affect cement demand, particularly in rural areas where incomes of people are linked to agriculture production.

After six strong quarters of growth in demand for cement, a proxy for construction activity in the economy, it is set to see a sharp drop of 500 basis points (bps) to 3-5 per cent in the first quarter of this financial year, against a 9-10 per cent rise in the January-March quarter of 2018-19, according to rating agency Crisil, based on a survey of 250 dealers and others stakeholders across cement value chain.

The sentiment score at the pan-India level for the next two quarters fell to 5.5 from the previous quarter’s 6.0, Crisil said. The survey measures the outlook on construction growth over the next two rolling quarters on a scale of 1 to 10, where 1 indicates a major decline and 10 indicates a robust rise (on a year-on-year or YoY basis).

Demand downturn
Crisil attributed the sudden downturn in demand to a slowdown in construction activity ahead of the general elections, labour shortage and delayed release of funds by the government. The report also found that a Rs 50-60 per bag increase in the price of cement in the January-March quarter weighed on housing demand as well. "There is a ray of hope as experts expect an upturn in demand from the third quarter, that is, post monsoon," rating agency ICRA said in a report. In April 2019, cement production at 28.7 million MT is lower by 13.3 per cent on an MoM basis. "ICRA expects cement demand growth to taper in FY2020 to around 7 per cent from a double digit growth of 13 per cent in the previous year. The demand has been tepid in Q1 FY2020 (April-June 2019 quarter) due to slowing of project execution on account of general elections (usually resulting in labour unavailability). In Q2 FY2020, the consumption is expected to be on lower side owing to the monsoon season. Hence, ICRA expects the demand to pick up in Q3 FY2020 (October-December 2019 quarter)," said Sabyasachi Majumdar, Senior Vice President & Group Head, Corporate Ratings, ICRA.

Industry volumes increased by one per cent YoY to 28.7 MT in April 2019 after registering 12 per cent YoY growth in 4QFY19 and 13 per cent YoY growth in FY2019, according to the data released by the Department of Industrial Policy and Promotion (DIPP) of the Centre. The strong growth in FY2019 was led by the government’s housing schemes and infrastructure demand, it added.

Cartelisation allegations
Recently, the government has stated in parliament that the Competition Commission of India (CCI) is examining complaints regarding hike in cement prices and cartelisation by companies. This initiative was taken up based on complaints from property and infrastructure builders and contractors, particularly those involved in building roads and highways.

The housing and real estate sector is the largest consumer of cement, accounting for about 65 per cent of the total consumption, followed by public infrastructure at 20 per cent and industrial development at 15 per cent.

Delay in monsoon
The progress of south-west monsoon in June 2019 (from 1 June 2019 to 26 June’19) has been slow with 31 meteorological sub-divisions out of 36 recording deficient or scanty rainfall, which has been the highest in the previous six years. During this period, there has been a significant deviation of 36 per cent from the normal rainfall. The rainfall so far has been scanty over central and western regions, according to Indian Meteorological Department data.

The live storage level in the 91 reservoirs across the country as on June 27, 2019 was 26 BCM, recording a contraction of (-) 11.7 per cent than the corresponding period previous year. The current live storage level of the reservoirs at 16.2 per cent of the full storage level, is lower than the 10-year average live storage, which is 19 per cent.

"A slow progress in monsoon, along with storage levels of reservoirs remaining below the 10 year average during June 2019, could affect the sowing patterns and in turn the crop production in the country.

The monsoon patterns need to be closely monitored going ahead as it has an important bearing on food price inflation and the contribution of agriculture to the overall economy," said CARE Ratings in its recent report. Rural economy’s prospects are linked to monsoon, which is the main source of increasing agricultural production. When rural incomes rise it will impact cement demand positively, along with demand for other commodities. As the monsoon season extends till September every year, one has to wait for the temporal and spatial spread of monsoon to arrive at a conclusion on agriculture productivity during the fiscal.

– BS SRINIVASALU REDDY

Concrete

Wonder Cement appoints Mahesh Singh as VP Corporate Brand Communication

Published

7 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

1 week 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

1 week 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.