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Builders allege cartelisation by cement makers

V. Rishi Kumar Hyderabad | Updated on March 12, 2018

C Sekhar Reddy

The Confederation of Real Estate Developers’ Associations, Builders Association of India, and other federations in the realty and construction sector are up in arms against the Cement Manufacturers Association, alleging that the latter has cartelised to jack up cement prices by about 50 per cent over the last 30 days.

Since the prices of cement, which were ruling at about ₹190-210 per bag a month ago, have shot up to ₹300-310 per bag, they have decided not to buy cement stocks during July 5-12 as a protest against the monopolistic situation the cement sector enjoys.

They are consciously adopting a confrontationist mode to highlight the issue.

Steep hike unwarranted

Addressing a press conference, C Sekhar Reddy, President, National, Credai, said the housing sector accounts for major demand (64 per cent) of cement consumption in the country. The present situation does not warrant an over 50 per cent hike in cement prices.

“The price rise is only due to cartelisation. The Government must intervene and resolve the issue. We are also contemplating taking up the matter with the Competition Commission of India (CCI), which had earlier passed an order on similar concern. The cement sector needs a regulator,” he said.

The Joint Action Committee, which includes Andhra Pradesh Real Estate Developers’ Association and Telangana Builders Forum, and represents over 2,000 developers and more than 1,000 contractors, has decided to oppose the cement price hike,

S Ram Reddy of Credai and P Dasarath Reddy of Apreda said that such a hike necessitates increase in prices by builders by about ₹100-150 a sq ft, which is totally unwarranted as there is no immediate trigger for such an increase in cement prices.

All stakeholders hit

They said the construction and real estate sectors are just about finding their feet in the backdrop of the State’s division and such hikes are detrimental to the interest of all stakeholders — general public, construction workers, builders and their suppliers in different segments, and the Government.

Shekhar Reddy said the protest was aimed at communicating the concern of various groups to the Government.

He added that they plan to take other measures, such as pressing their demand for a cement sector regulator.

He also suggested that the mergers and acquisitions were leading to greater consolidation and a monopolistic situation in the cement sector.

The two States of Telangana and Andhra Pradesh account for nearly a third of the country’s cement capacity.

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Published on July 02, 2014
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