Finance Minister P Chidambaram’s efforts to bring down cement prices have finally borne fruit as cement manufacturers have introduced cuts in prices.
Cement prices have come down by Rs 2-5 per 50kg bag in certain regions.
“Our company has announced a price cut of Rs 4 per 50-kg bag in our markets with effect from today. The industry is supportive of the government’s efforts to check inflation,” said HM Bangur, chairman and managing director of Shree Cements, a leading player in North India, and the vice-president of the Cement Manufacturers’ Association of India.
“We have reduced cement prices by Rs 2-5 per 50kg bag, depending on the distance of the selling market from the place of production,” said D Sundararajan, executive director of Binani Cement.
Cement companies are working out on the formalities and several other players are expected to announce price cuts this week.
“We are working out market-specific maximum retail price and we will announce price reduction in the range of Rs 2-4 per 50-kg bag within a day or two,” said AK Saraogi, chief financial officer of JK Cements.
Chidambaram had announced a 12 per cent ad valorem duty on cement last Thursday, after withdrawing the dual excise duty (Rs 600 per tonne for cement selling above Rs 190 per 50kg bag and Rs 350 per tonne for those selling at or below Rs 190), that he imposed on cement companies in Budget 2007-08.
However, as expected earlier, there has been no price cuts announced in centres like Maharashtra, where the 12 per cent duty has not brought any excise relief to companies.
“Though there were some rumours, we have not seen any price cut in the Western region,” said Sanjay Ladiwala, president, Bombay Cement Stockists & Dealers Association.
Cement has a weight of 1.73 per cent in the wholesale price index and has witnessed inflation levels of about 10-15 per cent while contributing to the overall inflation.