The smaller cement brands have started making their presence felt in Mumbai – the largest cement consumption area in the country. At a time when giants such as UltraTech, Ambuja, ACC and Grasim are still resisting price cuts, smaller players have already cut prices by Rs3-6 /50kg bag.
Many of the smaller cement makers do not even have factories near Mumbai. The city-based cement dealers said that these price corrections were effected in the last fortnight only. "This tactic may force big players to follow suit soon," they said.
Price corrections have come from players including Binani, JK Lakshmi Cement, Vasavadatta Cement, Indorama Cement, Coromandel Cement and Orient Cement. While the rates offered by big players range between between Rs 252 and Rs 255 a bag, smaller brands are available around Rs 246-248 a bag.
The city’s average monthly consumption is 650,000 tonnes, which in the peak season of January-May reaches above 700,000t. UltraTech, Ambuja Cements, ACC and Grasim are the dominant players in Mumbai, having almost 70 per cent of the market share.
With cement consumption rising in the city, smaller players were making good use of the opportunity, said dealers. Further, smaller players have added capacity in the last two years, thereby creating a surplus production to supply situation, felt industry analysts.
Vinod Juneja, MD, Binani Cement, said, "We have raised our capacity from 2Mt to over 6Mt now. Earlier, most of our output was getting consumed in the north, but now we will continue to venture into newer markets."