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Cement prices, which are at a low in Andhra Pradesh, are likely to go up thanks to a steep hike in power tariffs.
Last week, the State Government hiked electricity charges for all categories of customers, including the industry.
Cement plants which use HT 132 KV power will be hit the most as the tariff for this was hiked from Rs 3.97 to Rs 4.90 a unit. However, several units have set up their own captive plants over time.
“This will have a solid impact on the input costs for the cement industry,’’ S.V.S. Shetty, Chief Executive Officer, Anjani Portland Cement Ltd, told Business Line .
The industry is already at the receiving end with up to 40 per cent power cut in the State and many companies are purchasing power from the exchanges at higher prices.
“Tariff hike at this juncture will have a double impact on cement manufacturers,’’ Shetty said.
Apart from increase in unit charges, there is also a 40 per cent hike in demand charges which would hit the industry badly, according to K Ravi, Managing Director, NCL Industries Ltd.
“At present the demand is down and normally there is no room for hike in prices. But, we are not in position to incur further losses without passing it on to customers,’’ he said.
At the market place, however the cement prices in the State have dipped recently and are now in the range of Rs 200-220 a bag in Hyderabad, Rs 210-230 in coastal Andhra and Rs 240-250 in Rayalseema regions.
Industry experts are hoping that the prices will start climbing now. NCL Industries, which produces Nagarjuna Cement, has announced a price hike of Rs 7 a bag from Tuesday. Some other companies too are likely to increase price in the ensuing week.
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