1. As cement prices soar by over 60%, CREDAI eyes sourcing from Iran, Korea

As cement prices soar by over 60%, CREDAI eyes sourcing from Iran, Korea

CREDAI alleged that cement manufacturers have artificially raised prices by more than 60% in Telangana and Andhra Pradesh thus pushing the prices anywhere from `240-380 per bag in the last one week.

By: | Hyderabad | Published: April 18, 2017 5:59 AM
As cement prices soar by over 60%, CREDAI eyes sourcing from Iran, Korea.

Realtors’ apex body Confederation of Real Estate Developers’ Associations of India (CREDAI) is mulling to either approach the Competition Commission of India (CCI) or import cement from Iran, Korea or other countries, if the sudden unjustified steep hike in cement prices does not come down. CREDAI alleged that cement manufacturers have artificially raised prices by more than 60% in Telangana and Andhra Pradesh thus pushing the prices anywhere from `240-380 per bag in the last one week.

Hinting that this could lead to an increase in the construction cost in both states even while the cost of production of cement has remained constant, CREDAI has asked the state governments’ intervention to check the unrealistic increase in cement prices. “Cement prices in both states have witnessed a sudden jump of 60-70% in the last one week.

This unjust price rise may increase the construction cost which will have to be passed on to the consumers,” S Ram Reddy, President CREDAI-Hyderabad, said. We are also thinking of approaching CCI and also demand for a cement regulatory body besides looking at imports as well,”, he said, adding that there is also a Supreme Court hearing on May 2 on cement cartelisation issue. In fact, the import costs works out to be `230 or `240 per bag which is relatively cheaper than domestic manufacturing.

Meanwhile, CREDAI-Andhra Pradesh chapter have warned of boycotting construction activities if the abnormal hike in the price of cement in the state is not withdrawn in a week’s time. Alleging that the cement manufacturers had colluded to increase the prices of cement following self-declared dispatch holidays, the builders said they would stop buying cement and halt construction activity across the state, A Siva Reddy, CREDAI-AP president said.

Andhra Pradesh and Telangana, having over 20 manufacturers of cement, contribute about 26% of the total installed cement capacity of the country. The annual consumption of cement in Telangana and AP is about 22-24 million tonnes. Sales dispatches for March 2017 was about 2.15 million tonnes. The price hike will create extra burden on consumers who will have to bear the burden of heightened costs and escalations and delays in construction and deliverability of housing schemes and projects,” he added.

The housing sector accounts for a significant consumption of the total cement demand in India. We cannot be cornered by the cartel of cement manufacturers with a steep hike of approximately 60% without any changes in the input cost, demand or government taxes. We oppose this unilateral move by the cement manufacturers,” Ram Reddy said.

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