INDIA: Cement firms declined to bring down prices

Cement firms have declined to bring down prices as proposed by the Telangana government.

The firms, which sought time to take a decision on the government proposal, held discussions among themselves for three days. However, all firms were unanimous in their decision to not decrease prices.

Cement industry representatives have decided to meet Chief Minister K. Chandrasekhar Rao to explain the reasons for increase in prices.

However, as a “goodwill gesture”, the firms are willing to offer cement at lower prices for the government to take up its housing programme for the poor.

Representatives of different cement firms on Thursday met Chief Secretary Dr Rajiv Sharma at the Secretariat in this regard

Sources said, the firms brought to the notice of the CS that cement prices were Rs 320 per bag in July 2013, but came down to Rs 230 later due to poor demand in the state and started increasing from May 2014. They pointed out that though the price fluctuated from Rs 300 to Rs 340 recently, it has stabilised between Rs 300 and Rs 320 now, which is at par with prices elsewhere in the country.

They told the CS that the production cost has increased significantly with the rise in power, coal and transport charges and cement firms will face a crisis if prices are kept low. 

When the CS asked how lower rates were possible until recently, they explained that they deliberately kept the production low due to poor demand and none of the cement plants in the state could produce cement to their full capacity.

“All plants have been utilising just 55 to 65 per cent of their total capacity for the last three years due to poor demand on account of the bifurcation. Now that a stable government is in place and taking up infrastructure and irrigation projects, the outlook for the cement industry has turned positive All plants will start operating at full capacity incurring huge production expenditure. Prices have to be aligned with national prices to save the cement industry here from a crisis,” they said.

Dr Sharma told them that he will convey their contention to the CM who will take a final decision.