Cement Companies Transform Product Mix

With increasing cement supplies to north India, companies dependent on this market are changing their product mix from portland pozzolana cement (PPC) to ordinary portland cement (OPC) to sustain growth. OPC is used for roads and infrastructure while PPC is used in real estate projects.

Shree Cement managing director HM Bangur, who runs the largest single-location integrated factory in northern India, confirmed the trend. Mr Bangur said: “The contribution of PPC to our total income will gradually come down as we have decided to increase 20% of our OPC production in the subsequent few quarters.” Shree’s share is the highest in the Delhi market, the most significant market in the national capital region region. The company’s 86% output is sold in north Indian markets while the remaining 14% is consumed in central India.

Binani Cement has shifted its focus too. The group MD Vinod Juneja said: “The demand for OPC has more or less doubled in the northern region due to construction works for Commonwealth games and the international airport. Binani Cement is a leading player in the northern region. It enjoys 13% market share in Rajasthan. It dispatches nearly 45% of its sales in this state.

Analysts said the data shows that the new trend is gathering momentum in the northern markets. OPC constituted 21.6% of total sales in the June quarter from 16% in the year-ago period. They said even after the rise in OPC production, there is still shortage of this product in the market. “With the real estate boom slowing down in the last few months, the demand for PPC has also gone down. So it makes more sense for the cement makers to concentrate more on OPC,” said an analyst.