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Bharathi sees cement prices rising 5-10% on input costs
Bharathi Cement, a subsidiary of French major Vicat group, is expecting a further 5-10% rise in cement prices, primarily due to increase in raw material prices and a likely hike in diesel prices.
Updated : Mar 17, 2018, 06:22 AM IST
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Bharathi Cement, a subsidiary of French major Vicat group, is expecting a further 5-10% rise in cement prices, primarily due to increase in raw material prices and a likely hike in diesel prices.
The company, which has placed itself in the premium category in the sector, would also pass on the rise in costs to the consumers.
“The key raw materials saw a rise in prices by about 5-6%. The railway freight has also become expensive by about 4% and there is a talk about hike in diesel prices shortly. This would also add to the cost,” M Ravinder Reddy, director-marketing, Bharathi Cement Corporation, said.
The company caters to the cement demand in key markets such as Andhra Pradesh, Karnataka, Tamil Nadu, Kerala and Maharashtra. While the company’s sells its product at a maximum price of Rs300-315 per 50-kg bag in Kerala, it sells in AP at Rs220-250. The company gets about 36% of its business from AP and about 10% from Kerala.
Bharathi was founded by former AP chief minister YS Rajasekhara Reddy’s son and former Kadapa MP Y S Jagan Mohan Reddy. However, he recently sold a 51% stake to Vicat Group and continues to hold the balance.
Bharathi started operations in September 2009 with a capacity of about 2.5 million tonne.
On Thursday, the company announced the operation of another 2.5 million tonne, taking the total capacity to 5 million tonne.
“The originally planned expansion is complete now and the total cost of the project is at Rs1,623 crore. We will now start focusing on stabilising the capacities,” Reddy said.
The company’s units are located in Kadapa district. The first unit has been operating at about 58% capacity.
“We dispatched 4.55 lakh tonne and in the current financial year it would be 9.8 lakh tonne. We had a revenue of Rs140 crore last year and this year till November it was at about Rs346 crore. We hope to be cash-positive this year and it would take a year or two for us to become profitable,” he said.
The company plans to foray into the ready-mix concrete business. “We will look at it next year,” Reddy said.
