Price rise reasons

Price rise reasons
Published: 15 March 2004

Indian ement prices have been rising mainly because of the demand-supply mismatch. February demand has gone up by 10 per cent, compared to about 5.5 per cent in all other months. With the government stepping on the gas for completing the Golden Quadrilateral project and the pre-poll fever, demand for cement has shot up, KC Jain, senior president, Vasavadatta Cement, indicated.

Inability of the railways to provide wagon supplies to the extent anticipated by the industry and the limits imposed on trucks to carry less than 10 tonne compared to 14 tonne earlier had also led to a supply-demand mismatch, Mr Jain said. Demand has also piled up with coastal cement companies increasing exports to Iran, Iraq and other Middle East markets.

Prices in the Northern region will continue to rise and fetch the industry good price of Rs 150 to Rs 160 for the next three years, Mr Jain said. Cement prices in the west would stabilise at the current levels, but South would see a drop in prices, Mr Jain said.

For Vasavadatta Cement, growth has been about 17 per cent, compared to the industry average of 5.5 per cent. Mr Jain said the company would consider expansion of capacity of the prices remained stable at about Rs170 to Rs175.