Shree Cement seeks an image makeover, eyes bigger share of premium grade

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Shree Cement plans to double the share of premium products in its total volumes by March next year, as it attempts to break its image as a non-premium brand.

Prashant Bangur, Vice Chairman, says Shree Cement has long been perceived as a B-category brand, and the attempt is to move that perception to a category A or category A brand.

“Positioning is something we believe we have achieved. Now we have to push volumes for it,” said Bangur in an exclusive chat with Moneycontrol on Wednesday, referring to the company’s premium brands – Roofon and Bangur Power -- launched about five years back.

Changing perception

The shift in focus started a few months back, and the results are already showing, said Bangur. He said the share of premium products has improved to 10 percent from 8 in the last few months.

Bangur said the shift was long due. At present, premium products contribute 10 percent to total volumes, Bangur said.

The plan is to increase it to 15-18 percent by the end of FY24. In terms of overall volumes (premium and non-premium), Bangur expects Shree Cement to close FY2023 at 31 million tonnes and has set a target of 36-37 million tonnes for the next fiscal year.

Competitors in the A category

Shree Cement will need to compete with other brands such as UltraTech Cement and Wonder Cement in the A category in northern markets, a key region for the company.

Managerial changes have been brought about to shift the focus to the premium category. They include division of roles for sales and marketing. “We have now set up two different teams, with a separate head each for sales and marketing,” Bangur said.

On ground, Shree Cement also has a technical services team (also comprising civil engineers) with expertise in construction activities who will help improve sales by close interaction with customers, ICICI Securities analysts noted in a report released on March 23.

The note said Shree Cement’s premium brands trade higher by Rs 25 per bag, compared to a non-premium one.

When did the focus change?

Industry watchers say Shree Cement’s change in focus to premium brands coincides with the appointment of Neeraj Akhoury in October 2022.

Akhoury, whose last assignment was with Ambuja Cement, currently leads Shree Cement as managing director and is known as a ‘marketing man’ in the industry.

“We believe the new appointment at Shree Cement’s management level will try to lead this change, though it wouldn’t be easy,” said Satyadeep Jain, an analyst at Ambit Capital.

Jain said the company’s plan to increase share in the premium category will face a market test. “Every cement company is trying to increase its share in the premium category market. The main challenge is if the market is deep enough for it and whether customers are willing to pay a higher price. Shree Cement’s current products sell in the category B and category C range and are seen as a cost leader. To increase premium share, they will either need to change the positioning of current brands or launch new ones,” Jain said.