Indian cement companies may revisit pricing strategy after June

Indian cement companies may revisit pricing strategy after June
Published: 05 June 2008

The continuous rise in input costs, which eats into the profits of companies, may force domestic cement makers to re-work their pricing strategy after June this year. Further, the fuel price hike could act as a trigger for an immediate hike.

There has been no definite industry call on the matter, but, the companies Business Standard spoke to declined to comment on prices saying “the situation is uncertain and anything can happen.”

A month ago, several cement firms had taken a non-uniform stand on pricing, after being pressurised by the government. Some opted for freezing rates at the current levels, whereas others went ahead with cuts of INR2-7 on a 50kg bag of cement.

So far, the government has not taken any measures on the industry’s demands, which include reducing excise duties, abatement on cement and removing import duty on coal - the major contributor to the firms’ input cost concerns.

Sumit Banerjee, managing director, ACC - the country’s largest cement maker, recently said that after two-three months, the company would look at the scenario and decide about the prices. The company had chosen in May to freeze the prices for the period. However, it had added that this would erode margins.