Cement price discounts – eyewash

Cement price discounts – eyewash
Published: 18 May 2006

The Builders Association of India, which had approached the government against cement companies for steep hike in prices, today termed as an "eyewash" the cement manufacturers’ proposal to reduce prices for the Central Government supplies. "The cement companies proposal to give five per cent discount on government supplies is an eyewash. The government does not buy any cement directly and the consumers would not get any benefit," BAI (Delhi Centre) Chairman Arun Sahai said.

Reacting to Commerce and Industry Minister Kamal Nath’s statements yesterday, Sahai said it was the construction companies instead - even in projects of National Highways Authority of India and Central Public Works Department - that purchase cement and they would not get any benefit.

There was also no mismatch between production, sales and demand, he said, adding the reports that cement companies have agreed to increase production were misleading as manufacturing capacities were already being utilised up to 95 per cent.

Moreover, its not the retailers but the manufacturers that are profiteering, he said, adding they would again take up the matter with Nath and Department of Industrial Policy Secretary Ajay Dua tomorrow. Nath had met Cement Manufacturers Association yesterday after his ultimatum last week that the companies should come back to the ministry with a proposal to check surging prices.

Builders say that cement prices have shot up by 40-50 per cent since November 2005. The government intervened after the BAI complained against cement companies for excessive hike in prices during the past five-six months.