Cement cos raise prices despite warning by Gadkari

Source: The Hitavada      Date: 05 May 2017 09:37:06


By Ravi Chandpurkar,

THE cement companies were at it again forming a cartel and increasing the prices without any apparent reason. To make matters worse, the cement companies have hiked prices by Rs 40 per bag. On May 1, cement companies of all major brands had raised prices in bulk category (more than 1,000 bags) to Rs 315 per bag compared to Rs 275 per bag in the month of April. In March, the cement prices were being quoted at Rs 210 per bag resulting in a total increase of Rs 105 per bag from March to May, said sources on the condition of anonymity.


Sources in the industry said that in the absence of physical demand for cement in the market, how could the cement companies raise prices. The major cement brands are Birla Gold, Ultratech, Ambuja, ACC etc. In retail, the cement prices were being quoted at Rs 350 per bag.


The development has come despite a recent warning by Nitin Gadkari, Union Minister of Road Transport, Highways and Shipping alleging that the cement companies were adopting unfair methods and jacking up prices in the market. He warned them that the Government would start a cement manufacturing unit and procure cement at lower prices. The Government was giving a big boost to the infrastructure development projects like roads, highways, bridges, etc., and required cement in bulk quantities. Recently, cement companies had also increased prices by Rs 100 per bag while quoting rates in various road contracts. On this, Gadkari said that the cement companies would have to face the consequences if found establishing cartel and rigging cement prices.


Anil Nair, President of CREDAI Nagpur Metro said: “We strongly oppose the fixing of prices and forming a cartel by the cement companies. It is a matter of adopting unethical business practices to make profit by exploiting consumers. CREDAI’s national body is taking up the matter with the Competition Commission of India (CCI) at the national level.” Nair also said that CREDAI Nagpur Metro would be taking up the issue in its meeting scheduled next week with its members. The Government should intervene and do something to break the formation of cartel. Furthermore, non-Government organisations (NGOs) should actively protest against the rise in cement prices in the interest of the public, he suggested.


The hike in cement prices has brought great inconvenience to the builders.
The increase in cement prices makes the planned budgets of housing projects go haywire. If the cement prices keep on increasing every month, housing units would become more costly and out of the reach of the most individual home makers.

In the past also the cement companies had been found guilty by the Competition Commission of India (CCI) and were fined Rs 1,600 crore, sources added.