Builders say cement makers have increased prices by 50% in the last 6 months and as much as 20% after the Union Budget, blaming collusion for the supply problem.
Cement companies say the complaint is “ridiculous”, as the prices are controlled by factors like demand & supply, railway freight rates & excise duty.
A 50 kg bag of cement used to cost Rs. 170. It went up to Rs. 250 before the Union Budget & costs Rs. 300 now.
Mr. R. K .Arora, Chairman, Supertech said, “Excise duty went up by 2% but cement prices have gone up by minimum 20%. Therefore, we are including a cost escalation clause in our buyer-builder agreement due to uncertainty in the prices.”
Shree Cement MD Mr. H M Bangur said Business Standard cement prices in the NCR (National Capital Region) were not more than Rs. 260 to Rs. 270 per bag and there was no cartelisation. Cement is a commodity & all commodity prices move in tandem. You can not allege that there is cartelisation”
Mr. Vinod Juneja, MD, Binani Cement said, “Cement accounts for just 3 to 4 per cent of the cost of the whole project. What about the remaining 97%?”. The manufacturers were holding any stocks in godowns, but admitted the increase in rail freight rates and general inflation had impacted the prices a bit."
The NREDC (National Real Estate Development Council) had in November (2012) moved CCI, alleging an unduly steep increase in cement prices. The installed capacity of large cement plants had increased from 22.30 crore tonnes in 2009-10 to 23.40 crore tonnes in 2010-11.
However, capacity utilisation in 2010-11 declined to 76% from 83% in 2009-10.
An Ambuja Cement spokesperson said, '' cement production was a cyclical business. During the monsoon in June and July, as construction falls, demand for cement also falls, thereby cooling prices, too. October to December is the peak season for construction and prices go up"
Mr. Manoj Gaur, CMD, Gaursons, a Noida-based developer, said ''There were just 12 to 14 major companies in the Inidan cement industry, and they were able to increase prices by 50 to 60% in a short span of time. They shut their plants in the name of maintenance, artificially reducing supply of cement, impacting prices”
Mr. Nayan Raheja, Director, Raheja Developers said, ''Cement prices were Rs. 350 per bag right now from Rs. 180 to 200 about 6 months before. The major 14 manufacturers had stopped all supplies for a week in November, 2011"
Mr. Bangur, Shree Cement said, There were about 70 cement companies, not 14 as claimed by the developers. Second, in the last 30 years that I am in the industry, there has been no stoppage of supply even for a single day”
Src: BS
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