Within four months of the Tamil Nadu government’s intervention to control cement prices, Andhra Pradesh has asked cement companies to check prices and keep them at Rs200 per 50kg bag.
This price tag is below than the current national average, which is Rs220-230 per bag.
Top officials in the cement industry said any such artificial restrictions would be unfair and harmful for the industry.
Andhra Pradesh, which houses the maximum capacity of around 30Mt, has not seen much rise in cement rates compared with other parts of the country. The retail prices in the state are in the range of Rs 210-220 a bag.
Commenting on the development, top sources in the Cement Manufacturers’ Association said the issue would be “taken care of” as it was done in Tamil Nadu’s case.
In January, the state government had threatened to take over cement units if prices did not come down. The call was criticised by the industry as a way of nationalising cement units despite having a free economy.
Samba Siva, director (finance and commercial) of Andhra-based My Home Cement and Industries, said, “Rs 200 a bag is okay but again it depends on different places in the state. Presently, wholesale prices are Rs 210 a bag here.” He further added at time when demand is high there should not be any call for such restrictions.
Insiders in multinational cement companies having operations in the country said the developments are just “effect-oriented statements” to tamper with the market forces.
“If prices are not high, how would the company meet their rising input costs,” they said.