Shree Cement Chairman: We Raised Prices Because Customers Think Expensive is Good!

• H.M. Bangur, Chairman of Shree Cement, revealed they increased cement prices because Indian customers perceive expensive products as higher quality, despite making good profits with cheaper cement.
• Shree Cement, the third-largest cement company, prioritizes organic growth over acquisitions, citing high premiums, debt concerns, and the ability to strategically choose locations for expansion.
• Bangur noted sluggish cement demand growth (4-5% vs. expected 10%) despite India's GDP growth, indicating structural weaknesses and low true returns (7-8%) on high capital investment.
• The company's business philosophy emphasizes continuous hard work, caution during good times, and a strict focus on its core business: cement and Ready-Mix Concrete (RMC).
• Bangur also highlighted the importance of raw material security, aiming for 10 times more limestone reserves than consumption, and shared an anecdote about meeting Warren Buffett.

Why It Matters: Shree Cement increased prices, adapting to customer belief that expensive products are superior.