Cement prices go up by Rs 7 per bag

MUMBAI: Buoyed by improved demand, cement makers have raised prices by Rs 3-7 per 50-kg bag across the country from Wednesday. With this, the retail cement prices have gone up to Rs 260 a bag. Big players such as ACC, Ambuja Cements, Grasim and UltraTech have communicated about the price hike to dealers.

Others like Binani will follow suit this week, while a few firms, such as Shree Cement, will take a call shortly. ACC has increased prices by Rs 7 per bag, while Ambuja has hiked it by Rs 3 a bag. The Aditya Birla Group companies, Grasim Industries and UltraTech Cement, have raised Rs 5-7 per bag, said dealers.

Ambuja Cements marketing head Ajay Kapur told ET: ���The rise in cement prices were due to escalation of demand from rural market and government projects.��� Top officials of ACC and Grasim Cements declined to comment on the price hike.
Vinod Juneja, managing director of Binani Cement, said his company would increase prices from this week.

���In Delhi, Lucknow, Chandigarh and Haryana, we are increasing prices by Rs 3 per bag, whereas in Gujarat, Mumbai and Maharashtra, the hike will be Rs 5 a bag,��� he said.

Shailendra Chouksey, whole time director, JK Lakshmi Cement, said hike of Rs 3 has been implemented from Wednesday, as JK Lakshmi dispatches up 20% in March over corresponding month last year. HM Bangur, president of the Cement Manufacturers��� Association and managing director of Shree Cement, said: ���We will take a call in next few days though demand is still high.���

Cement analysts don���t foresee prices to soften in the short-run. In the long-term, however, they expect prices to fall, as new capacities come up for production. The outlook for the first quarter of FY10 looks better than what it was a year ago, and expects a 8% incremental growth in the current fiscal, analysts added.

Cement demand has gone up in March. For example, the Aditya Birla Group���s shipment in March rose 11.2% to 3.37 million tonne year-on-year.

Sumit Banerjee, managing director of ACC, had told ET last week: ���Prices need to go up to Rs 300 per bag because current prices do not support ACC���s plans to invest in creating new capacities. It will not be easy for us to go ahead with our future expansion plans beyond 2011.���