Observing the industry from last two decades, Ashok Ku Patra, Proprietor of Srikanta Agency, has seen the industry through thick and thin. He spoke with ICR about how the scenario has changed with time and what the pain points of cement dealers in India are.
How long have you been in the business and which geographic regions do you cover?
We have been catering to the cement market since last 20 years. The geographical area covered by our network includes major territories in Bhubaneswar, Odisha. We supply material as far as Tankapani Road, Basuaghai, Bankual, Ranga Bazaar, Baragada and Brahmeswar Patna.
How much do you stock and how much do you dispatch every month?
We have a stocking capacity of 200 MT while our dispatch volume ranges from 700 MT to 800 MT per month.
In what way has the economic slowdown affected your business?
The economic slowdown has affected the market drastically. Almost everyone is feeling the impact of the sluggish demand. We are seeing highly reduced requirements coming in from the retail segment. Sales are moving very slowly.
What are you doing to sustain your business?
In this situation, we are compelled to reduce the stocks in our warehouse and are no longer taking advance booking of materials.
What are the challenges you are facing?
We are facing several challenges on several fronts. Today´s market is the buyer`s market. Cement companies are promoting several sub-dealer shops in small areas. The market is getting more than saturated with small cement sellers. This is creating unnecessary competition.
Besides, companies are selling cement through non -trade sales. The price gap between cement sold via trade sales and non-trade sales is very high, up to a Rs 40 to 50 difference per bag. As a result, unauthorised shops are selling non trade cement at trade sales rate with a discount of Rs 10 to 15 . This is giving a tough time to authorised shops And the dealers are losing in the market.
The credit policy too, should be tweaked. While dealers like us are getting credit facility up to five days with a security amount, the sub- dealers are getting 10-15 days` credit facility without having to deposit any security. Sub-dealers are free from any worries of losing cash discounts.
What are the changes that you have seen in the dealership model over the years?
Due to so many cement brands entering the market, it is now easier than ever for anyone to get dealership of a company. So the advantage of being a sole dealer and assurance of business is no longer there. There is stiff competition amongst dealers.
Is RMC impacting your market?
RMC is not that popular in the market and the public is not fully aware of the product. So far, it has not affected our market.
What is your message to the industry?
The price difference between trade and non- trade cement must be eliminated.
Is there any inferior quality in non trade cement