Cement majors reduce prices by Rs 4-6 a bag

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Mumbai: Following the Prime Minister’s package and the slew of measures announced by him to boost demand, which includes a reduction of central value-added tax by 4 % on all products except petroleum products, Indian cement majors like ACC Ltd, Ambuja Cements and Shree Cement have decided to pass on this benefit to consumers and have reduced prices by Rs 4-6 per 50 kg bag effective Tuesday.

ACC Ltd, the country’s largest cement manufacturer on Tuesday announced that the company has reduced its price by Rs 5 per 50 kg bag. Similarly, Ambuja Cements Ltd (ACL) has also passed on the benefit, where the company in an e-mail statement said it has, “decided to pass on the benefit of excise duty reduction to the end user. The Indian Railways have, however, increased the freight tariff by changing the classification for coal and cement which is expected to push the prices of cement up by Rs 1.50 to Rs 2 per bag. After factoring in the increased railway tariff, the price of ACL cement is expected to go down by Rs 4 to Rs 6 per bag from today.”

Confirming the price cut in cement, HM Bangur, CMD of Shree told FE, “We have reduced our cement price by Rs 4-5 per bag in various centres effective Tuesday taking into consideration the freight increase and excise cut.”

Meanwhile, a spokesperson from UltraTech Cement Ltd told FE that the company may rationalize the price by Rs 4-6 per bag. Experts believe, others are likely to follow suit soon.

However, the industry also expressed concern on clinker not been given excise duty relaxation.

Says Shailendra Chouksey, whole time director and CEO JK Lakshmi Cement said, “On a preliminary reading of the notification, there seems to be an anomaly that clinker has not been mentioned for reduction in the excise duty. This has created a peculiar situation where excise duty on intermediary product is higher than the excise duty on the finished product. While no doubt this matter would be taken up with the government as this seems to have been an oversight, the impact of this anomaly would also need to be assessed”