Cement prices drop in Delhi-NCR after builders allege cartelization

About four cement firms in the region have cut prices by about 17-19% following allegations of artificial price hikes, according to Credai-NCR

New Delhi : Cement manufacturers have started slashing prices in the Delhi NCR region this week as demand slips and pressure from builders grows. These companies have been facing allegations of price fixing from builders who had taken the matter to the Competition Commission of India (CCI).

About four cement companies in the Delhi NCR region have cut prices by about 17-19% following allegations of artificial price hikes and a cartel-like behaviour, said Manoj Gaur, president, Confederation of Real Estate Developers Associations of India (Credai)-NCR.

The companies have started taking orders at a price of Rs.245-250 per bag from this week, lower by about Rs.50, said Gaur. He did not disclose the names of the companies which have cut prices.

Two dealers from the NCR region, who did not want to be named, said there has been a price cut in the range of Rs.5-15 per bag in the last two to three weeks as demand continues to remain weak. Dealer prices differ from bulk prices at which cement makers supply to builders.

Deepak Kapoor, President(Western UP), CREDAI adds, "cartelization cannot be accepted. NCR is the largest real estate market with lacs of people buying their homes every year. Such activities would have adversely affected the whole market. This wasn't acceptable."

Ashok Gupta, CMD, Ajnara India Ltd, a prominent developer in NCR said, "we are happy to see a united step and finally getting the favourable result. We should think progressively to benefit the realty sector. "

Rajesh Goyal, MD, RG Group, summed up saying, "the market is already reeling under heavy pressure. The allied industry players should think alike and for the benefit of all and not just few". 

“Cement manufacturers had to cut prices as they were not sustainable. We expect further correction due to weak demand. With the festive season, labour shortage may lead to lower construction activity,” said one of the two dealers mentioned above.

According to these dealers, the price of a cement bag in Delhi is Rs.285 compared to Rs.300 per bag two to three weeks back.

Last month, builders in and around Delhi said they would stop buying cement from UltraTech Cement Ltd and Lafarge India Pvt. Ltd, which they alleged had pushed up prices artificially.

Mukesh Khurrana, MD, Rudra Group, a upcoming name in NCR realty said, " despite a low demand the cement prices have been continuously increasing. It is difficult to cope up with such steep price hikes."

Despite low demand, cement prices in recent months have risen 20-40% in major Indian cities, according to Kushagr Ansal, whole time Director, Ansal Housing.

Vikas Bhasin, Chairman, Saya Homes, added that realty sector must take steps towards betterment and it is good that CREDAI took the final step which otherwise would have harmed the interest of everyone. 

The real estate lobby, which has 220 members, had sent a petition to the CCI on 5 October against the price hikes.

The NCR is India’s largest real estate market, consuming about 12-15 million tonnes of cement a year. Companies including JK Lakshmi Cement Ltd, Shree Cement Ltd, UltraTech and Lafarge are among the cement manufacturers with a major presence in the north Indian market.

An email query sent on Thursday evening to JK Lakshmi, UltraTech and Lafarge remained unanswered. Concerned officials at Shree Cement could not be reached for comments.