Cement cos slash prices in Gujarat

Indicating the first signs of a roll-back in last three years, the cement companies have slashed the billing price by Rs 3 per bag in Gujarat on Monday. The ban on exports of cement and clinker have forced companies to take this move, according to a senior official of a leading cement company.

About 85-90% of the country's exports take place from Gujarat and players like UltraTech Cement and Gujarat Ambuja Cement are the leaders. In the non-trade business or bulk segment, the prices of cement have been slashed by Rs 8-10 per bag in the last one week, according to industry sources.

"The retail price of cement is about Rs 212-215 per bag, while for non-trade business the landing cost about Rs 204-208 per bag," said an official of a cement company which has operations in Kutch.

With 18-20 million tonnes of capacities to be added this year, there is a fear of oversupply in the industry and there can be further pressure on pricing. So far, the prices have been slashed only in Gujarat and there has been no rollback in other states. The monsoon season is near and there can be a slowdown in demand during this period. Interestingly, the cement companies had hiked the prices in April by Rs 3-5 per bag, citing rising demand and soaring input costs.

When contacted a senior official of UltraTech refused to comment on prices. UltraTech is the country's largest exporter of cement clinker. The company exports over 2.5 million tonnes per annum, which is about 30 per cent of the country's total exports. Ambuja Cement and UltraTech together account for about 58 per cent of the total cement shipped overseas in FY 07-08.

Many companies from Pakistan including DG Khan, Pakistan Cement Company, a subsidiary of Orascom Construction Industries and Lucky Cement have begun exporting cement to India. The landing cost of cement to ports of Gujarat is about Rs 170-180 per bag, sources said.