Cement cos agree to slash prices

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New Delhi, May 14 : Close on the heels of the country’s steel manufacturers agreeing to reduce prices by Rs 4,000 a tonne, cement companies on Wednesday decided to cut rates by Rs 3-7.5 per 50 kg bag with immediate effect, after a meeting with Union commerce and industry minister Kamal Nath.

Briefing reporters after the meeting, Nath said that the reduction will be implemented on the basis of prices prevailing on April 1, 2008. The decision is expected to bring down inflation as with cement and cement products having a weightage of 2.16% in the whole sale price index. Inflation had risen to a three-year high of 7.61% for the week ended April 26.

However, Nath said the reduction of prices will not be applicable to companies that are already supplying cement at concessional rate to state governments like Tamil Nadu and Andhra Pradesh. Cement Manufacturers Association (CMA) president H M Bangur said that cement companies will hold the price line for at least three months.

To make the situation more savoury for the industry, the minister said the government was looking into proposals to give some relief to the cement industry, including an abatement in excise duty and fixing the problems of coal supplies to cement firms. The government had earlier banned cement exports in April after cement companies increased prices by 3-4%. The cement industry has been citing the increase in prices of coal, transportation and fuel as the reason for the price increase.