Cement portal fails to gain traction

Procurers use it for price quotes but continue to buy offline

In the retail space, the average buyer may be moving towards online shopping, but shopping of road construction material has failed to go down the same road. A case in point is the road ministry's initiative to facilitate cement procurement and delivery online more than a year ago, which has seen limited success, as procurers continue to prefer offline deals.

Till date, INAM-PRO, the portal launched in March 2015, has seen orders for 550,000 tonnes (t) of cement. To put this in perspective, Mumbai's Bandra-Worli Sea Link project consumed 100,000 tonnes of cement. The country's total cement production in 2015-2016 was at 282.78 t.

Of the 550,000 t orders placed, data available on the portal show, orders for just 18,726 t were confirmed.

Here is why.

"The volumes on the site are yet to pick up as users are not very comfortable with online transactions and prefer to do offline dealings. The portal is being widely used to get an estimate of the prevailing prices. We see a lot of traction in that form. However, users still prefer to settle the order offline either with the same seller who gave a price quote online or with other local dealers at the same price," said an official, who did not wish to be identified.

Top officials from two companies registered on the portal agree.

"The site does not bring a lot of business as most procurers use it to get a price quote and then bargain with their local dealers to offer the same price," said a top official of one of the companies.

In terms of cement offered by companies so far, 26.97 t has been offered on the portal so far, of which 26.96 t continues to remain as balance, data available on the portal show.

Even as companies see limited success in garnering business from the portal, the road ministry sees it as the right step in arriving at a fair market price.

"It really does not matter to us. The idea was to provide a mechanism where they could derive a price and create a price deterrent for cement cartels. It is not compulsory for the company to source from the cement portal," said an official from the ministry.

As of date, the portal has 579 registered buyers and 41 registered cement companies.