Concrete

Constantly increasing prices of building materials are a major challenge

Published

4 years ago

January 16, 2023

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Shraddha Kedia-Agarwal, Director, Transcon Developers, brings in the perspective of developers as they tackle the issue of rising cement costs and the overall impact on consumer behaviour.

How has the rise in cement and building materials cost impacted your business?
The rise in cement and other building material costs have had a major impact on our business. Construction costs have risen significantly as budgets have remained fixed, resulting in a decrease in profitability. The prolonged delivery of materials has also caused a delay in projects and a requirement for increased cash flow during the construction phase.
As of March 2022, construction costs had gone up by 10 to 12 per cent year-on-year due to a 20 per cent spike in key material costs such as cement, steel, aluminium, copper and fuel. This was further exacerbated by geopolitical issues and inflation leading to increased labour costs. Developers are particularly challenged, as they have to deal with high levels of debt and liquidity constraints.

As the costs are expected to remain volatile for a few more months, is there any change in your strategy or approach towards the launch of new projects?
Though we are actively monitoring market conditions, we are not planning any change to our approach on launching new projects. However, we are increasing construction budgets and focusing more on external amenities in order to provide more value to buyers. This may result in increased costs, but the extra benefits provided should outweigh this cost.

Tell us about the impact on timely delivery of developer projects.
The constantly increasing prices of building materials are a major challenge for the construction industry, as they can lead to delays in project completion and reduced quality of work. Fluctuations in the market value for these materials present a significant risk for all stakeholders involved, such as suppliers, contractors, and clients.
There is an increased lead time for materials, and suppliers are hesitant to accept orders due to the uncertainty of the market. This means that material contractors are further apprehensive about accepting offers or quotation requests. As a result, developers may need to adjust their plans in order to ensure timely completion of projects.

How has the consumer behaviour changed with change in property costs? Do you expect the demand to decrease?
The changing property costs have certainly affected consumer behaviour. As prices increase, consumers may be more hesitant to purchase and less likely to spend beyond their budgets.
The real estate industry has been adapting to the pandemic since its onset, and the second wave of infections had further compounded their challenges. In particular, there has been a steep rise in the cost of key raw materials such as steel, cement, solid blocks, nails, binding wires, and plywood. This increase has been as much as 100 per cent in some cases compared to last year, severely limiting the developers› ability to offer discounts to their customers.
The decrease in demand may drive developers to offer more amenities or better value proposition in order to remain competitive in the market.

What is the major challenge that you have come across with the rising costs and how are you combating the same?
One major challenge with rising costs is that companies must make the right decisions on how to optimise their manufacturing processes, implement cost-saving measures and negotiate supplier terms in order to reduce their input costs without sacrificing quality. This is why selective manufacturing and value engineering are important, as they allow companies to reduce costs while still achieving their desired output. Additionally, fast/advance payments can help companies meet their vendors› needs while also helping them reduce their overall expenses. Finally, a focus on material consumption can provide companies with an opportunity to decrease their costs by reducing their materials used and exploring cheaper alternatives.

How do you envision the future of real estate development and consumer behaviour with the rising cost of cement and other construction materials?
In the future, the rising cost of cement and other construction materials will likely lead to real estate developers exploring alternative recycled materials. Additionally, consumer behaviour will likely shift towards more energy-efficient and environment-friendly construction methods, as well as green design initiatives like zero-waste construction and biophilic design. Real estate developers will also have to look for ways to reduce their material consumption, such as through the implementation of prefabricated structures, the use of intelligent building technologies and the development of holistic sustainability strategies.

-Kanika Mathur

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Concrete

India’s Cement Sector Cuts Energy Use, but Worker Safety Worsens

iFOREST finds efficiency gains alongside water and safety concerns

Published

2 days ago

November 2, 2026

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India’s cement sector has improved its energy and carbon efficiency, but rising groundwater use in water-stressed regions and deteriorating worker safety remain significant concerns, according to a report by the International Forum for Environment, Sustainability & Technology (iFOREST). The findings also highlighted weak policy implementation and gaps in sustainability reporting.

India, the world’s second-largest cement producer, uses about 2.54 gigajoules of energy per tonne (GJ/t), below the global average of 2.88 GJ/t. However, renewable sources accounted for only 5.1 per cent of the sector’s energy mix, indicating continued dependence on conventional sources.

The report assessed 18 cement companies against 107 Business Responsibility and Sustainability Reporting indicators for FY24 and FY25. The companies covered 87 per cent of India’s cement production. Carbon emissions intensity declined from 0.58 to 0.57 tonnes of carbon dioxide per tonne, but total emissions increased 4 per cent to 224.3 mn t, equivalent to about 6 to 7 per cent of India’s overall emissions.

Overall water withdrawal declined 9.5 per cent during the study period, while withdrawals in water-stressed areas, mainly in Rajasthan, increased by more than 20 per cent. Groundwater’s share of withdrawals in these areas rose from 27 per cent to 38 per cent, raising concerns about the sector’s impact on vulnerable water resources.

The sector employs about 228,000 people, including 63 per cent contractual workers, 3.1 per cent women and 0.07 per cent persons with disabilities. Women in key managerial roles earned 26.8 per cent less than men, while median pay for women workers fell 11.1 per cent in FY25 as men’s pay increased. Worker injuries rose 36.5 per cent to 359, and fatalities increased from 17 to 22, with workers accounting for more than 90 per cent of deaths.

iFOREST recommended cement-specific reporting guidance, standardised metrics, mandatory production disclosure and third-party verification. It also called for environmental, social and governance policies to be integrated into business strategies and implemented more effectively on the ground.

Concrete

Ambuja Cements Expects Volume Growth to Outpace Industry in H2

Ambuja Cements sees stronger trade and institutional demand in H2 FY27.

Published

2 days ago

November 2, 2026

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Ambuja Cements expects its sales volumes to grow faster than the cement industry during the second half of fiscal year 2027, as it seeks a recovery in institutional demand after a weak first half. The Gautam Adani-owned company is aiming to rebuild volumes while protecting profitability.

The company reported a 90 per cent year-on-year decline in consolidated net profit attributable to owners of the parent to Rs. 1.93 bn for the quarter ended 30 September, from Rs. 17.74 bn a year earlier. The previous year’s profit included a reversal of income-tax provisions worth Rs. 16.97 bn. Revenue from operations rose marginally to Rs. 91.66 bn from Rs. 91.3 bn.

Trade volumes increased 8.6 per cent year-on-year in the September quarter, but weaker institutional sales left overall volumes broadly unchanged. Ambuja Cements expects both trade and institutional sales to turn positive in the third and fourth quarters. Trade sales are made through dealers and distributors, while institutional or business-to-business sales involve bulk supplies to infrastructure developers, government projects and real estate companies.

The company had earlier reduced institutional sales that did not generate adequate returns. It now plans to rebuild the business selectively, while continuing to prioritise trade sales and higher-value products. Trade accounted for 74 per cent of sales in the quarter, up six percentage points from a year earlier, while premium products increased to 37 per cent of trade sales from 35 per cent. Blended cement’s share rose to 82 per cent from 77 per cent.

Ambuja Cements commissioned 4.6 mn t of capacity during the quarter. Another 3.2 mn t at Bathinda in Punjab and Jodhpur has stabilised, with the facilities expected to ramp up in the second half. A further 2.4 mn t facility at Varkala in Bihar is scheduled for commissioning during the period. Higher fuel and logistics costs remain a challenge, while the company has realised a cement price increase of about Rs. 10 per bag in October and is targeting operating costs of Rs. 4,250 per t for the full year.

Concrete

JK Lakshmi Cement Begins Rs 110 Billion Assam Plant Project

The 2.5 MTPA integrated cement plant is expected to be completed by FY2029.

Published

4 days ago

October 31, 2026

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JK Lakshmi Cement has recently laid the foundation stone for Project Kamakshi, its first integrated cement manufacturing facility in Assam, marking its entry into Northeast India. The groundbreaking ceremony was held at Umrangso village in Dima Hasao district in the presence of Assam Chief Minister Himanta Biswa Sarma.

The project involves an investment of Rs 110 billion, including the mining lease, and will have an annual cement production capacity of 2.5 million tonnes, supported by a 1 million tonne clinkerisation unit. Scheduled for completion by FY2029, the facility is expected to generate employment for over 2,000 people while catering primarily to the growing Northeast market.

The integrated plant will feature dedicated railway sidings to facilitate efficient transportation of raw materials and finished cement, strengthening supply chain reliability and regional distribution.

Vinita Singhania, Chairperson and Managing Director, JK Lakshmi Cement, said, “”Project Kamakshi is the start of a long-term relationship with Assam and the wider North East. This is a region that is building fast, and it deserves quality cement made close to home. With this plant, we want to bring scale, jobs, and dependable supply to the region. At JK Lakshmi Cement, we believe that building a stronger India goes beyond infrastructure. It is also about growing together with the communities we serve.””

The investment aligns with the company’s strategy to expand into high-growth markets beyond its established presence in Northern, Western and Eastern India. The project is also expected to support regional economic development and infrastructure growth.

JK Lakshmi Cement aims to pursue its expansion plans while working towards its long-term target of achieving net-zero emissions by 2047.