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Cement cos may hike prices by Rs 7
Published on 1 Apr. 2010 12:42 AM IST
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Cement prices are likely to increase by up to Rs 7 on Thursday, the third successive rise this year by companies looking to undo the jump in input costs, said dealers. “Costs of coal, the main raw material, and freight charges have gone through the roof,” said Shiva Cements chairman and managing director RP Gupta, adding that the rise in prices of diesel and petrol has dented margins.
According to Economic Times report, after the price rise, a 50-kg cement bag will cost around Rs 285 a bag in Mumbai and Maharashtra, said dealers. The wholesale price in these markets will be around Rs 275 a bag. Cement will be sold at Rs 310 a bag in Delhi, while some pockets of Tamil Nadu, where prices rose this week, may be spared.
Cement makers are confident that the price rise will not dampen the improved demand due to the government’s increased spending in construction projects. Mr Gupta said prices would fall in the long run after a boost in supply.
Rourkela-based Shiva Cements, partly owned by ACC, said it would raise prices by Rs 7 from Thursday. Shree Cement managing director HM Bangur said the industry practice is to pass on the increase in input costs to end-users. Adesh Gupta, CFO of Grasim Industries, India’s largest cement maker, declined to comment on a price rise, but said demand is healthy.
The price rise will be sharper in the eastern and northern regions, said Angel Securities cement analyst Rupesh Sankhe. The latest round of price rise will make cement costlier by Rs 20-22 a bag since January. It will increase the construction cost by Rs 30 a square feet in the next quarter in major cities and markets, said Mr Sankhe.
The Indian cement industry is growing at 8-10% a year, the second-fastest after China, with an annual production capacity of 240 million tonne. About 110 million tonne of capacity will be added by investing Rs 50,000 crore in the next three years, said the Cement Manufacturers’ Association.

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