India’s cement makers stare at bag shortage as West Asia war hits inputs

₹6–7 until recently, has now climbed to ₹11–12 due to a PP shortage.Due to the shortage, per tonne cost of cement will increase by roughly ₹60–80, considering 20 bags of 50 kg each per tonne, said Sourav Mitra, partner, Oil and Gas, Grant Thornton Bharat.At the heart of the issue is polypropylene (PP), used to produce woven cement bags. Refineries in the Gulf region are increasingly diverting feedstock such as propane and butane toward liquefied petroleum gas (LPG) production amid supply uncertainties, tightening PP availability.Bag manufacturers are currently receiving only about 60–70% of their contracted PP chip supplies, according to a Motilal Oswal report dated 18 March.

Raw material costs have surged nearly 70% in the past two months.Government-led diversion of propane and butane toward LPG is expected to further constrain PP output and, in turn, bag production, said Mitra. Consequently, PP cement bags are likely to witness cost escalation of 30–40% per bag, according to Grant Thornton Bharat and Motilal Oswal estimates.At least one large cement maker said the shortage is already visible."We are seeing some tightness in the availability of cement packaging bags, largely driven by shifts in polypropylene (PP) supply and increased demand from other sectors.

This has had a cost impact of approximately ₹100 per MT,” said Neeraj Akhoury, managing director, Shree Cement Limited in an email.Akhoury clarified that operationally the situation remains under control.“At this stage, alternative packaging options such as jute and paper are not commercially or operationally viable at scale. We remain focused on ensuring consistency in operations while closely monitoring the evolving supply environment,” Akhoury said.According to