SENAN SHAH, Om Swastik Trading
has been a dealer for eight years. He exclusively deals in ACC Cement. About volatility in price, he says that it creates doubts in the mind of the consumer leading to under buying or at times excess stocking of the cement which in both the scenerios is not healthy for business. A better margin is what he expects from the manufacturers for dealers, and he feels a joint effort should be made by all the manufacturers to bring down the credit period. He believes that there should be more investment in infrastructure and more spending on housing schemes, as it will help boost construction activities thus bringing down prices of cement and in the end it will result in a healthy real estate demand. The monthly dispatch is around 1,500-2,000 mt. He has a packing unit near Mumbai, which caters to the daily demand of cement. Senan Shah says that in order to increase sale the manufactures have to increase sales promotion activities at all levels of the distribution chain. In this competitive environment, the manufacture should take initiatives to promote the brand to newer clients. "Ideally OPC should sell more, but it is the blended cement which is in demand, because of higher margin", he stated. The demand for ready mix concrete is also showing a growing trend. Certainly, there is a demand for higher grades of cement as they are recommended by various consultants. "Yes the increase in diesel/petrol prices leads to increase in cement prices and with dealers having fixed margins in rupees and not in the form of percentage the additional cost just adds more investment and lower returns," replied Senan Shah. He added "In city like Mumbai, it is the brand power of a particular company and its profit margins, which are the deciding factor that influences the retailers demand pattern". Many manufactures pack the cement in tradition forms, and he wished that it can be more attractive and durable. The delays in octroi can be minimised if a mechanism can be worked with the local authorities where a prepaid system can be established at the packing units of various cement plants and daily deposit can be made. He has tied-up with banks for finance and pays an interest which varies from 13-16 per cent. He laments that the interest rates are going up and sees it as a hinderance in the already struggling profitability of the cement trade. Senan Shah is the Joint Secretary of Cement Stockists and Dealers Association of Bombay.