The Hindu Business Line : L&T making enquiries to import cement

This cannot be good news for the Indian cement industry which has been recently facing a lot of flak for price increases of the commodity; but construction major Larsen & Toubro is looking at the feasibility of importing cement for some of its projects.

It has been the cement industry's contention here that cement imports are not viable. With the maximum duty of 15 per cent applicable, the landed cost of cement will be much higher than the domestic cost, is what industry officials frequently say. Also, almost everywhere, cement prices are higher than in India, according to them.

"The landed price of imported cement may be on a par with domestic cement, even a little higher, but the quality is better," said Mr K.V. Rangaswami, Senior Executive Vice-President, L&T.

With better quality cement, one can use less of it in concrete and eventually save costs. "We are trying out various combinations in our laboratories to work this out," he said.

Cement could be imported from China or from some of the South East Asian countries, he said. Cement prices in the country have risen by between 20 per cent and 30 per cent in the last six months (according to various estimates and claims).

The recent spurt in cement prices has affected L&T only marginally but its cost component in projects could vary from 15 per cent to 50 per cent in the case of flyovers or building construction, he said. L&T is making inquiries as to which country it could import from to advantage, he said.

The moment the market got whiff of these inquiries, the price of cement has dropped a little actually, he added.

With cement, steel and other commodity prices fluctuating, L&T sometimes asks its customers to source their own commodities.

"Or we assume in our tenders that any fluctuation in these prices will be taken care of by the client," said Mr A.M. Naik, Chairman & Managing Director, L&T.

"We even pass up projects if these things cannot be done; we cannot take risks on commodities whose prices we don't have control over."