Cement prices to soar 15%: JK Cement

“We expect that cement prices will increase in the range of 10-15 per cent after monsoon comes to end,” Company’s MD & CEO Yadupati Singhania told reporters here today.

Noting that the overcapacity coupled with long monsoon had a bad impact on cement prices this fiscal,Singhania said that cement prices were much better last year.

“Last fiscal we were getting Rs 50 more per bag (50kg) (compared to this financial year’s cement prices). The main reason behind low prices is excess cement capacity in the market and monsoon season,” he said.

At present,cement prices range between Rs 220 per bag to Rs 250 per bag in northern India,while in the southern market it costs Rs 200-220 per bag.

With less price realisation this year,companies are hesitant about expanding capacities. “Cement companies are not going for expansion because of overcapacity in the market,” he said.

JK Cement,which has 3.5 per cent market share,is expecting modest sales of Rs 2,000 crore in the current fiscal against Rs 1,900 crore achieved last fiscal.

Singhania said that the cement industry is expected to grow by 8 to 10 per cent this fiscal.

When asked about ramping up capacity,Singhania revealed that the company would look at raising capacity next year at its plant in Rajasthan,which would see a capacity addition of 2-3 million tonnes,entailing an investment of Rs 1,500 crore.

“We hope the cement industry will improve next year and then we will look at expanding capacity,” he said.

Along with it,the company would also set up a 30 MW captive power plant for self-consumption.

After the capacity expansion,company’s total production capacity will reach 10 million tonnes from the present 7 million tonnes.