Anil Singhvi, Executive Chairman of Shree Digvijay Cement on Wednesday said the overall recovery in the economy has been good and that has boosted demand for cement.
“Margins are reasonably good in cement right now as demand has also picked up,” he said in an interview to CNBC-TV18.
“I have been saying for last almost 3-4 quarters that to me cement and for that matter the economy doesn’t look as bad as it looks to most people around. So, I am happy that we are seeing a very good economic growth in the economy and it will bode well for everyone,” he said.
Singhvi said he was hopeful of making a 20 percent margin.
“I think we should do at least 20 percent if not more. I am very happy to say that our power cost has come down because we have almost rehashed the entire power plant on this. So, I am very happy on the cost front and that is what our margins will come from, and not the cement prices going up alone,” he said.
On price hikes, he said all the players have increased prices by Rs 5-10 per bag mainly to offset higher input costs and maintain margins.
“Price increases are taking place essentially to cover up the cost because the fuel cost, be it power or fossil fuel, or diesel for that matter which is what the industry is heavily dependent upon for road transport, have gone up in last 2-3 months disproportionately.
Normally cost increases are always there in cement industry, but this time it is quite steep increase. So, industry has been trying keep the margins alive otherwise it becomes very difficult in cement to keep the margins on. So, there have been some increases in the pricing in every region of the country essentially to cover up the cost and keep the margins alive,” Singhvi said.