Cement manufacturers agree to hold price line for one year and to absorb input cost in response to Kamal Nath’s Appeal

Cement manufacturers have agreed to hold the price line and not increase cement prices any further for one year with effect from today and to absorb all the additional costs themselves, following prolonged deliberations with the Commerce & Industry Minister, Shri Kamal Nath, here today with senior representatives of the cement industry including the President of the Cement Manufacturers Association in the context of the recent increase in prices of cement. They have also agreed that if any concession is given to them by way of excise duty and other statutory levies, they would pass on the benefit of it entirely to the consumers.

Shri Kamal Nath strongly urged the producers to reduce the cement prices which had risen significantly particularly after 28th February, 2007 when an additional excise duty of Rs.200 per tonne was levied on cement costing more than Rs.190 per bag (MRP).

The cement producers explained at length the reasons for their inability to absorb the impact of the higher excise duty and also explained why it had to be passed on to entirely to the consumers. They referred to the increase in the cost of raw materials particularly fly ash and the higher energy cost and transportation charges. In particular, they drew the government’s attention to the higher price of coal required to be obtained by them from the open market. They also mentioned that the sustainable way of controlling prices was to increase supply faster than the demand which was growing at 10% annually. They had, therefore, taken measures to expand the installed capacity by almost 100 million tonnes in the next three years by incurring an expenditure of over Rs.40,000 crore.

Source : Press Information Bureau

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