The race for market leadership in the cement sector has grown more intense with the Aditya Birla Group (comprising UltraTech and Grasim) and Holcim (ACC) asking dealers in Mumbai to exclusively sell their cement bags for a commission or face a halt in supplies, according to prominent dealers.
?We have been told we would get about Rs 2.25 extra per bag if we exclusively sold products of both these cement majors,? one Mumbai-based dealer revealed. According to industry sources, about 35-40% of the dealers in Mumbai and surrounding areas (Dahanu and Mira belts, Thane, Raigad and Panvel) have agreed to sell either Aditya Birla Group cement or Holcim cement bags.
?We have been informed by a cement major at a stockists? meeting that if we did not accept exclusive dealership, the supply of cement bags would be stopped. We have been given until the end of this month to decide,? the dealer added.
However, when contacted, an Aditya Birla Group spokesperson said, ?Around 60% of our dealers are exclusive, and it?s completely voluntary.? A spokesperson for ACC Ltd declined to comment. More than 80% of ACC?s dealers have an exclusive arrangement with the company, it is learnt.
Says Shailendra Choksi, director, JK Laxmi Cement, ?We cannot bind dealers to become exclusive sellers of our commodity. Of late, this practice may have started because of short supply, but this is not the best practice.?