Sanghi Inds to enter Mumbai cement market

Gujarat-based Sanghi Industries is set to enter Mumbai, the largest cement market in the country. The company is planning to launch its cement brand - Sanghi Cement - in the city towards the end of this month.

Hemant R Pandey, senior president, Sanghi Industries, said, "We have been planning to enter the Mumbai market for sometime. We think that the time has come now. We are planning a soft launch in the city in a week."

The company is planning to bring around 30,000 tonne of cement a month to Mumbai, which records total cement sales of above two lakh tonne in month. "We will be pricing at par with the leading cement brands in the city," Pandey said.

In the past Sanghi has been criticized by market leaders in Gujarat for selling at lower prices to garner market share. A leading cement stockist in Mumbai said, "Sanghi's entry in the Mumbai market will not make much of a difference to the overall price level as there is enough demand."

Sanghi is planning to set up ready-mix concrete (RMC) business in the next six months, "We are exploring the possibility of setting up a RMC line near Ahmedabad in the next quarter. Along with this we are also planning to manufacture PPC grade of cement in the coming 2-3 months."

The company had already lined up an investment of Rs 700 crore for an expansion plan to double its capacity to 8 million tonne per annum.

Sanghi had set up a 4 million tonne per annum plant in Kutch in March 2003. Analysts estimate that the cost of setting up a new RMC line would be in the region of Rs 25 crore.

Currently the company exports over one lakh tonne of clinker every month to the Middle East. "There is a huge demand for cement and clinker in the Middle East. This has also pushed export prices," Patel said.

Cement prices to go up in the west

Retail cement prices in the western region of the country will go up by Rs 5-10 per 50 kg bag next week. Prices in Gujarat and Rajasthan are expected to touch Rs 140 per a 50 kg bag, while in Mumbai, retail cement prices will stand at Rs 180 per 50 kg bag, after the increase.

Wholesale prices in Mumbai are also likely to increase to around Rs 155-160 per 50 kg bag. Other parts of Maharashtra such as Pune, Nasik and Nagpur are also set for a similar price hike.