India’s cement sector is facing rising cost pressures in bag production due to an acute shortage of polypropylene (PP).
The disruption, linked to supply chain impacts from tensions in the Middle East, has led to a sharp increase in bag prices. Industry estimates suggest the cost of a standard cement bag has risen from INR6-7 (US$0.06-0.07) to INR11-12, potentially increasing cement production costs by INR60-80/t.
The shortage stems from reduced PP availability, as Gulf refineries divert feedstock such as propane and butane towards LPG production. Bag manufacturers are reportedly receiving only 60-70 per cent of contracted PP supplies, while raw material costs have risen significantly in recent months.
The resulting increase in packaging costs is expected to add further margin pressure on Indian cement producers, who are already facing elevated fuel and energy costs.
