Mumbai: Cement prices are rising due to a tight demand-supply mismatch despite massive investments going into capacity build-up by companies.

Prices in Mumbai have risen by Rs5-10 to Rs235-240 per 50 kg bag and are expected to go up further by Rs15-20 to Rs260 per bag.

Analysts said the demand for cement will further rise by 10 per cent per annum for the next three years as realisations of capacity additions will be felt only in the last quarter of the financial year 2008.

Many cement companies are planning major expansions. Two leading cement companies — ACC and Gujarat Ambuja Cement — alone are investing over Rs3,000 crore in setting up greenfield plants and ramping up capacities.

The AV Birla group companies Grasim Industries and Ultra Tech Cement will be investing close to Rs3,900 crore in capacity additions.

Demand for the commodity during the fourth quarter of the financial year 2007 is seen at around 44 million tonnes against a supply of 42 million tonnes.