Nuvoco Vistas Corporation Ltd, the cement division of the Gujarat-based Nirma Group, has implemented a price increase of ₹10 per bag starting in April. The company attributes this adjustment primarily to escalating costs linked to the ongoing conflict in Iran, which has disrupted crude oil supply chains and driven up prices for key raw materials used in cement production and packaging.
Jayakumar Krishnaswamy, Managing Director of Nuvoco, explained that the surge in polymer granule prices—essential for manufacturing cement bags—has been a major factor behind the cost rise. Polymer granule prices jumped from approximately ₹99 per kilogram in February to ₹155 per kilogram in March, significantly increasing packaging expenses. The company anticipates packaging costs to remain elevated or potentially rise further through May and June, estimating an increase of about ₹100 per tonne attributable to these materials alone.
The disruptions in crude oil supplies due to the Iran conflict have led to a shortage of polymer granules in the market, creating mounting cost pressures that the company finds difficult to absorb. Krishnaswamy noted the limited flexibility to mitigate these packaging cost increases internally, making a price adjustment necessary.
Beyond packaging, other inputs such as gypsum and petcoke have also experienced price hikes. Gypsum, which is crucial for regulating cement setting time, has seen cost increases near ₹20 per tonne because of import challenges, particularly from Oman, where supply lines have been severed. To address this, Nuvoco is exploring alternatives such as flue gas desulphurisation (FGD) gypsum sourced from power plants.
Fuel costs are similarly affected, with petcoke becoming more expensive amid supply constraints. In response, the company is reducing petcoke usage and increasing reliance on domestic coal for kiln fuel in cement manufacturing.
The price increase reflects the broader impact of geopolitical tensions on sectors dependent on crude-linked materials and imports, underscoring ongoing uncertainties in supply chains and input costs within the cement industry.