Cement makers to hike prices

Mumbai: Taking advantage of the possibility of a substantial increase in cement consumption in the near future and encouraged by the higher dispatches in the month of September 2001, cement manufacturers have decided to raise cement prices in Mumbai from next week.

Domain-B had earlier reported that cement dispatches had increased 16.1 per cent in September 2001 to about 8.2 million tonnes from about 7 million tonnes in the corresponding period of the previous year. Production, too, had risen 19.3 per cent to about 8.3 million tonnes in September 2001 from 6.90 million tonnes in the corresponding period of the previous year.

Though the exact hike is not clear, dealers have indicated that while Larsen & Toubro and Gujarat Ambuja Cements may hike the 50 kilogram cement bag price by about Rs 8, ACC and Grasim are likely to effect a price hike of about Rs 5 per bag. Other dealers varied in their assessment saying that price hike would be uniform to around Rs 8 per bag by all manufacturers.

Sequentially, while wholesale cement prices would rise to anything between Rs 153 and Rs 158 per bag, retail cement prices would increase to anything between Rs 168 to Rs 175 per bag. Cement prices haven't moved up uniformly cross the country. They continue to rule at low levels in states like Madhya Pradesh and in cities like Pune and Hyderabad.

Industry experts feel higher prices will sustain only if there is a genuine increase in demand, else they will fall. On the other hand, cement manufacturers are confident of demand going up significantly, emanating mainly from infrastructure and housing projects.

On the infrastructure side, the manufacturers give the example of the golden quadrilateral project, which is complete to the extent of 10 per cent, and is likely to pick up speed as indicated by the government some time back. They also point out to the good monsoon in the current year, which they say is likely to spur rural housing demand.