India is the second largest cement producer in the world, accounting for seven percent of the global production. But India’s per capita cement consumption of 200-250 kg dwarves against the global average of 500-550 kg. Global issues like COVID and the Ukraine-Russia Crisis have hiked the cost of fuels, such as pet coke and coal, which increased the cement manufacturing costs. The cement prices in Mumbai grew by over 10 percent in the last year, and still, there is no respite.
Nationally, cement prices surged by 15-20 percent, which has severely impacted the progress of infrastructure and realty projects across India. Nonetheless, as the Government's continued focus on affordable housing and infrastructure projects has been apparent in the Union Budget 2023-24, it will drive the domestic cement demand, as the cost hike is anticipated to slow down in the future. India’s cement manufacturers are also expected to add 80 million tonnes to the total production in 2023. Moreover, this capacity is likely to grow at almost six percent CAGR till 2028.
Indian cement industry: Major players
Around 70 percent stake of the Indian cement industry is controlled by 20 players. India’s cement production is spread across 210 plants in various locations in the country. Most of these plants are situated in South India.
Here are the top five cement manufacturers in India-
- UltraTech Cement Ltd is the largest cement manufacturer in India. The company produces grey cement, white cement and Ready Mix Concrete (RMC)
- Ambuja Cement is a part of the LafargeHolcim conglomerate and holds 21 percent market share
- ACC Cements controls around six percent stake in India’s cement market. The firm has 17 cement factories, 75 ready-mix concrete plants and a 50,000-plus dealer network
- Shree Cements Ltd was incorporated in 1979 and clocked 29.30 million tonnes of cement production in 2022
- Dalmia Bharat Ltd is the fifth largest cement manufacturer by revenue. The company is renowned for producing super-specialty cement used in airstrips, railway sleepers, and oil wells
Cement price list in Mumbai
Here are the latest cement prices by the top cement companies in Mumbai.
| Cement Brand | Price/ 50 kg bag |
|---|---|
| UltraTech Cement | Rs 425 |
| Ambuja Cement | Rs 435 |
| J.K. Laxmi Cement | Rs 420 |
| JK Laxmi Pro Plus | Rs 438 |
| ACC Cement | Rs 370 |
| Shree Cement | Rs 320 |
| Dalmia Cement | Rs 420 |
| Ramco Cement | Rs 430 |
| Birla Cement | Rs 420 |
| Jaypee Cement | Rs 400 |
| Hathi Cement | Rs 350 |
Note: The prices listed above are for 53 Grade Ordinary Portland Cement.
How cement prices impact the housing sector
As per industry reports, the cost of construction has increased by 10-12 percent in the last year. Moreover, the prices of raw materials like cement and steel have surged by almost 20 percent from March-end 2022.
After the pandemic, the real estate sector is slowly catching up and responding to the pent-up demand. Any significant increase in the prices of raw materials is bad news for the real estate sector. The rise in the raw material costs leads to an overrun in the final construction cost for the developers; further increasing property values.
As per CRISIL, the average cement price increased to Rs 395 per 50 kg bag in the beginning of 2022, rising by almost 12-15 percent on a yearly basis. Further, prices increased by Rs 25-30 per bag in June 2022. As a result, constructing a house has become expensive these days. Important raw materials, like brick, sand, coarse aggregates, steel and PVC pipes, have also seen price growth.
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Know Your Neighbourhood Well
Cost of constructing a house in Mumbai
The construction cost in Mumbai is higher than the national average due to its high population density and limited space. Out of the costs incurred, material cost is responsible for the maximum share, i.e. 60 percent, followed by labour costs and the contractor’s margin. Depending on the material quality, a 1,000 sq ft property can cost between Rs 35 lakh and Rs 50 lakh in Mumbai.
Hence, if you are planning to construct a home in Mumbai, evaluating the current input cost and other factors is crucial, more so if you have opted for a home loan.
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