The Hindu Business Line : Freight cut on fly-ash buoys cement cos

Mumbai, Feb 26 Reduction in freight charges on fly ash appears to have enthused cement companies. This apart, industry also welcomed the proposal to set up new bulk handling facilities for cement transportation with private participation and the removal of the busy season surcharge through the new facilities.

Mr A.L. Kapoor, Managing Director, Ambuja Cement, said, “The Railways will be increasing the number of wagons to 58 from 40 (per train), enabling it to carry 1,500 tonnes more than the 2,500 tonnes currently being transported. The throughput will increase by about 64 per cent and achieved at a marginal cost. Hence, the Railway Minister should have considered passing on a part of rise in revenue to the cement sector.”

Detention time

Moreover, there is no indication on the detention time of the wagons as we have to load an additional of 18 wagons, he said.

“A major quantity of fly ash which is now transported by road will now shift to rail. Removal of busy season surcharge will also help save cost. We will consider passing on a part of the saving to our customers,” said Mr Vinod Juneja, Deputy Managing Director, Binani Cements.

“For making a tonne of cement, 25 per cent fly ash is needed and it is sourced from various destinations. The reduction in freight rates is a major gain for cement companies,” said Mr Hitesh Agrawal, Senior Research Analyst, Angel Stock Broking.

Bulk handling

“The railways should focus on bulk handing of cement rather than in bags. Specially designed wagons should be introduced to transport cement to ready mix concrete (RMC) manufacturers. Worldwide, only 15-20 per cent of cement is sold in bags unlike India’s 95 per cent,” said Mr Kapoor.

The Railway Budget has also provided 30 per cent discount on entire traffic in place of incremental traffic booked from goods shed. Discount on incremental traffic booked from private sidings has been increased to 40 per cent from 30 per cent. Indian Railways has set a target to transport 200 tonnes of cement by 2011-12 from the current 100 tonnes.

More Stories on : Railway Budget | Cement

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