Huge demand to up cement prices in North: Binani Cement

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In an interview with CNBC-TV18, Vinod Juneja, Managing Director at Binani Group of Industries , spoke about the cement industry and its pricing.

Here is a verbatim transcript of an exclusive interview with Vinod Juneja on CNBC-TV18. Also watch the accompanying video.

Q: Can you confirm price hikes in any of the markets that you operate in? We were just confirming it with ahead of the stockiest association?

A: As far as Binani Cement is concerned, so far prices have gone to the north side, Hyderabad, Tamil Nadu, Maharashtra, Surat and Gujarat. However, the impact of the prices in Rajasthan, Delhi, Punjab and Haryana is not too much. It is not too far because there is a severe shortage of food grains in India. Most of the logistic priority has gone to the Indian Railways for food grains and fertilizers. As a manufacturing cement company, we had got a schedule upcoming for lifting of cement. The railways are diverted to other sector. It disturbed the whole planning. We have to use trucks where you have to pay the price.

This is a temporary phase but if this particular trend continues, the cement prices in Northern India, where commonwealth games are there or railways, metro railway, airport express, bridges and roads are coming, will be rising. We as a manufacturing company have no immediate intention.

Q: Where are prices trading at right now? With Rs 15 per bag hike, what would that take prices to within their Northern region right and Western region?

A: As far as the Northern region is concerned, it is ranging at Rs 250-255. In the Western region, it is about Rs 260 plus. In the Northern region, there is no rise in prices. We are talking of the capacity hikes in the counties where cements capacity is going upto 250-260 million metric tonne. India is such a good and vast country, where we can observe upto 300 million tonne capacity. However, there will be a mismatch in demand and supply. Cement is in great demand since shelter is the most important thing. We also require cement for infrastructure, roads sector, bridges and hospitals.

Binani Group is a cement manufacturing company of 6.5 million metric tonne in India. We are trying our best for 100% capacity. We are running at full capacity with no stock. Whatever we produce, we sell it on the cash and carry basis. If this trend continues in the South, you can't expect North to not have the heat of the fire. So the prices in the North will also come up. The peak season in Northern India has many reasons. We are aware that the Prime Minister has especially monitored a committee who is monitoring on a daily basis on what is happening in the commonwealth games.

Q: Give us some details on the Indonesian coal mine that you are about to buy.

A: As far as Indonesia is concerned, we have reached a memorandum of understanding (MoU) and we have made some payments to that also. By next week, our things will be very clear in the first week of December. Our company is depending a lot on imported Indonesian coal as it has good calories for burning. Indian coal is available but it has a burning capacity of 40. Logistically, we take the coal from Indonesian ports to the Kandla port. From there, it reached overnight plants in Udaipur and Neem ka Thana. In Indonesia, we are going to be a longer term players for the supply of coal, which is like a bloodline for the cement industry.