Cement Prices Dip Rs 20 In Kolkata

Cement prices in Kolkata have plummeted by around Rs 20 per 50 kg bag to the Rs 140 levels in the last six weeks.

The prices have also shown a falling tendency in the whole eastern belt and are hovering around Kolkata prices.

Analysts attributed the dip to the lack of construction activity in the festival season.

Senior industry sources said that a diversified company with major interests in cement has also been undercutting in recent weeks.

According to analysts, two cement companies belonging to two factions of an industrial house was selling at lower than market rates to grab market share.

 

"They are using it as a negotiating tool so that they get a reasonable market share when they go to the north," said a cement analyst in a Mumbai-based merchant banking firm.

For the last two years, French cement major Lafarge has got a stranglehold on the eastern market with two acquisitions -- that of Tata Steel's 1.7 million cement unit and Raymond's 2.4 million tonne plant.

In recent months, even Gujarat Ambuja has set up an additional grinding unit near Kolkata to cater to rising demand in the eastern markets.

The eastern market accounts for nearly 17 per cent and 20 per cent of the total despatches of ACC and L&T, respectively. Grasim's despatches to the east is close to 13 per cent of its total despatches. In the east, the market share of ACC is 13 per cent, L&T's is 12 per cent and that of Grasim is 6 per cent.

Grasim's is slowly shifting focus to the north where it is setting up a one million tonne grinding unit at Bhatinda in Punjab. It is also in the process of acquiring the Chunar and the Dalla units of UP State Cement.

ACC already has a strong presence in the north with its 2.4 million tonne Gagal units in Himachal Pradesh. Besides a 1.3 million tonne grinding unit at Ropar in Punjab and a 1 million tonne cement unit in Dharlaghat at Himachal Pradesh, Gujarat Ambuja has recently commissioned its grinding unit in Bhatinda.