Chandigarh, March 24
The construction sector has been hit hard as the cement manufacturing companies, which appear to have formed a cartel, have increased the price of cement by Rs 100 per bag in the past few months. In the retail market, the cement is available at Rs 225-230 per bag while in bulk it is available at Rs 220 per bag.
Builders, contractors and other bulk users of cement have urged the Union Government to set up a Cement Regulatory Authority to regulate price and cement trade. They have also urged the Government to slash the import duty on cement by 50 per cent to check the price rise. Manufacturers should not be allowed to manipulate the cement market. The export of cement should be stopped immediately.
In fact there is acute shortage of the ordinary portland cement (OPC), used by contractors for Government and defence construction works. Builders say the shortage has been deliberately created by the cartel to jack up cement prices further. " Cement manufacturers have returned the money of builders and contractors who had booked OPC in advance in bulk a few weeks ago", say industry sources. Contractors and builders say the OPC had virtually disappeared from the market.
The price of the OPC was Rs 150 per bag about six months
ago. But today it is not available now even for Rs 220 per bag, say contractors. Most of the cement manufacturers are offering pozzolana portland cement (PPC) to contractors. That is prepared by mixing flyash generated by thermal plants. However, contractors are not allowed to use it in construction works for various reasons. "It needs more curing", say industry sources.
Mr Anil Raizada, General Secretary of the MES Builders Association of India, told The Tribune on the phone from Delhi that his organisation had submitted a representation to the Union Defence Ministry regarding the shortage of cement in the market and the unprecedented rise in its price in the past six months.
For an ordinary person, the construction cost of his house has gone up because of the rise in the price of cement. Moreover, the steel price has also gone up again. It is now hovering around Rs 28,000 per tonne whereas six months ago it was only Rs 22,000 per tonne. And then price of bricks had also been on the rise in northern states.
Two groups of manufacturing companies have 43 per cent share in the cement
market. These groups play a major role in determining the supply of cement in the market. Other groups are small players having mostly 3 to 4 per cent share in the market. And small players have to follow what major groups do in the market.
“Taking into account average increase in price Rs 20 per bag in January ,2006, over the prevailing price in December 2005, the cement companies have earned a profit of Rs 453 crore in January alone apart from the normal profit earned by them in routine", says the MES Builders Association.
