July 17, 2019

Impact of the rise in cement prices on the Real Estate Industry

Rakesh Reddy, Director, Aparna Constructions, Construction Week

India’s Cement Industry, is all set on its pricing power after being unable to increase realizations due to the prolonged phase of capacity overhang. The last fiscal year was favourable for the cement industries and clocked a double-digit volume growth for the first time in nine years.
While the move is beneficial for the cement industry, it has impacted the realty sector negatively. The two primary reasons for the rising price of cement are growing real estate demand and logistical factors which affect supply.

Our Director, Mr. Rakesh Reddy, in conversation with the Construction Week (Online),  addresses the inefficiencies in the vendor management and bid management processes when buying cement. He talks about the continuously evolving system of practices that are designed to increase efficiency and mitigate risk. He also adds that cement supply is currently the largest and fastest-growing procurement risks in the real estate sector. To manage this risk, they are trying to maintain the highest benchmarks of construction quality by implementing backward integration which allows more efficiency and control of the development ecosystem and shields the customers from elevated costs.


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