The Hindu Business Line : Cement makers to renegotiate price for AP housing projects

Hyderabad March 16 Andhra Pradesh cement manufacturers will be renegotiating prices of the commodity for housing projects undertaken by the State Government for weaker sections of the society after March 31.

The industry had committed to supply cement at prices lower than the market with a condition to review them after the said period, as per market situation, the President of All India Mini Cement Manufacturers Association, Mr Ramesh Chandro, told Business Line.

Depending on logistic cost of transporting cement from various locations, the industry is supplying cement at Rs 135, Rs 145 and Rs 150 per bag of 50 kg.

"But the cost is likely to increase from the coming financial year," he said. The prices too were reviewed in September last year from Rs 125, Rs 128 and Rs 133 respectively, he added.

Since July 2006, when the industry started the supplies, the prices have been cheaper by Rs 50-70 per bag for projects such as like Indiramma Housing Scheme and Rajiv Griha Kalpa compared to the existing market price.

According to Mr Chandro, the cement requirement was for construction of around 54 lakh houses up to 2009, equally divided over the period starting 2006.

DEMAND PRESSURE

He added that though the Government had released orders for 18 lakh tonnes of cement, the supply has been for about 11 lakh tonnes till February 28.

"We have been given time to meet the rest of the demand by April 15," he said. Some manufacturers though, have sought time till May due to demand pressure, he added. According to industry estimates, cement production in India has been around 155 million tonnes from April 2006 to February 2007 from major and mini units combined.

There are 121 major players and 150 mini units in the country.

"While the consumption of cement remained between 11 per cent and 11.2 per cent in 2006-2007, it will grow up drastically between 12.5 per cent to 15 per cent in the coming two years which will mean an additional requirement of 35- 40 million tonnes," Mr Chandro said.

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