Economy & Market

Prices start inching up as construction season sets in

Published

8 years ago

January 2, 2019

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There is no respite in growth in demand. Taking cue from this development, some medium and small players are testing the market with small hikes.

After falling 2.61 per cent in December 2018 from the lifetime peak of 2054.7 points, the ET Cement Index that tracks domestic cement price movements bounced back by 2.35 per cent to 2048 points in January 2019, mostly on the back of beginning of a new construction season. The index is unlikely to rebound from here with the lifetime peak just seven points away and several cement industry majors are still opting for building higher volumes to hiking prices. If it breaks out of the life peak and continued its journey upwards for a couple of months in succession we can say there is a secular upward trend in prices.

Sandeep Dubey, Lead Analyst – Research, Edelweiss Broking Limited, who prepared a report on various issues impacting the cement industry based on his interactions with various stakeholders at the ICR Cement Expo 2018 held in Hyderabad on December 20-21, 2018, said, ‘While many players who attended the conference were of the view that FY19E (2018-19 Estimate) demand will grow by 7-8 per cent, they believe that demand is expected to outpace GDP growth, going forward. Subsequently, the per capita cement consumption will inch up to 300 kg by FY21E.‘

Management of South-based companies expect Andhra Pradesh (AP)/Telangana markets to continue growing at over 15 per cent, primarily led by strong demand emanating from the government-led infrastructure and irrigation projects. Maharashtra market is expected to grow at 10 per cent, while Karnataka region is expected to grow at 5 per cent. On contrary, the companies foresee subdued demand in Tamil Nadu and Kerala market on account of lower construction activities and low availability of sand in some regions, Dubey added.

Commenting on the UltraTech Cement results for the quarter ended December 2018, Vaibhav Agarwal of PhillipCapital India said that though their operating numbers have beat their/consensus numbers by 4 per cent/1 per cent respectively, absence of pricing power vs. peers visible in Q3 numbers was the only key concern for the company. That means UltraTech Cement did not participate in the recent price hikes effected by cement companies.

In fact, UltraTech has been pushing volumes for quite a while instead of hiking prices of its products in the process of assimilating Binani Cement, which it has acquired under insolvency process a few months back.

MARGIN PRESSURE
Though cement demand is expected to grow in double digits during FY19 (2018-19) with pre-election thrust to infrastructure, the unit EBITDA (Earnings before interest, tax, depreciation and amortisation) margins are shrinking, due to prices remaining low, said the leading brokerage CLSA in a report.

‘FY19 (2018-19) is likely to end with near double-digit demand growth, which will also take up utilisation. This much-anticipated event, however, has been a big disappointer as prices did not see any benefit and in fact, unit EBITDA margins contracted in FY19,’said CLSA’s Investment Analyst team led by Vivek Maheshwari, while trimming its FY19-21 EPS estimates for the major players by 3-15 per cent. ‘Lower energy prices are a relief, but cement prices are the key, and uncertainty prevails here, which is quite counter-intuitive in the context of rising utilisation rates,’Maheshwari added. Cement price hikes is a must for stock price performance, feels CLSA. Over the past decade, the cement industry has witnessed a decline in utilisation rates, despite which, cement prices have held up fairly well.

Stating that the industry feedback indicated that FY19 growth of 9-10 per cent has primarily come from government-led infrastructure and a boost from pre-election spending (states as well as centre), the CLSA report predicted a 7 per cent growth for FY20, ‘despite a tough base.’Across regions, the south and east have witnessed strong growth while the west faces some challenges.

Over the past several years, a weak macro weighed on cement demand which reported growth of sub-5 per cent growth over FY11-18 (FY18 growth of 8.5 per cent is off a very low base).

Cement supply additions continued and rose 5 per cent year-on-year (YoY), but trailed incremental demand in FY19, which drove up industry utilisation by around 3 percentage points YoY to 69 per cent in FY19, the report said, while pegging the CAGR of 4.5 per cent in utilisation, given upcoming capacities, said Maheshwari.

RISE IN PREMIUM
‘Of late, pricing discipline is a result of joint effort by both small cap and large cap players and it’s bound to increase amid the busy construction season which will start from January 2019 onwards. As an alternative, cement companies have been trying to increase the share of their premium category,’says Dubey.

Traditionally, housing sector comprises 60-65 per cent of total demand while infrastructure took the backseat with merely 30 per cent of demand. Of late, roads and infrastructure segment has gained huge traction with multiple projects being executed in smart cities, airports, metro projects, sea ports and affordable housing segments, acting as a new trigger. ‘Share of bulk cement has shot up to 20 per cent from mere 5 per cent (in FY2013). Ready Mix Concrete (RMC) demand has picked up significantly on the back of humongous demand arising from metro projects, mass housing projects, and high-rise residential projects,’according to what Dubey gathered from the stakeholders.

Southern region is witnessing divergent
demand with Andhra Pradesh/Telangana persistently growing robust, while Tamil Nadu still facing the heat of sand mining ban (as per managements), despite the advent of mechanised sand, says the Edelweiss report.

– 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.