Rise in cement price unfair, say builders

Rise in cement price unfair, say builders
Published: 08 March 2006

The apex organisation of builders in Rajasthan has expressed concern over escalation in cement prices due to alleged cartelisation of big players in the sector. The cement industry is into profiteering and it is high time the authorities resorted to application of Monopolies and Restricted Trade Practices (MRTP) Act to rein in the industry, it has said.
 
The annual meeting of the Rajasthan unit of the Builders’ Association of India (BAI) here observed that cement prices had been showing an upward trend since January and in Mumbai and Delhi the prices have reached Rs180 and Rs190 per bag (50 kg) respectively from Rs145-160. There has been no reason for the price increase as the Railways, which carried 90 per cent of the cement from the production centres, did not raise the freight charges in the past two years. 
 
 "This is the second cartelisation by the big cement companies in the past five years. Since January this year there has been an increase of Rs 50-55 in cement prices per bag in Delhi and Rajasthan which consume 500,000t of cement per month," S.P.Goyal, former president of Rajasthan BAI, said here on Monday. "There is no justification in the increase in prices as even if one accounts for the 40 per cent increase in road transport cost the increase should have been Rs 7-8 per bag," he noted. In Rajasthan the Government had even brought down the Sales Tax on cement last year from 16 per cent to 9 per cent, he observed. 
 
"The Governments as well as the public should watch out. In the near future there would be only three very big cement companies in India," Mahendra Sethi, chairman of Rajasthan BAI, cautioned. He cited the case of recent take over of ACC Ltd and Gujarat Ambuja Cement, which account for 23 per cent of the country’s total production, by the Swiss company, Holcim Group. Now the Holcim Group along with the Kumar Mangalm Birla Group, account for 43 per cent of the market share in cement, he pointed out.