Cement TO GET CHEAPER: Cos to cut prices by Rs 5 per 50-kg bag from Mar

Cement TO GET CHEAPER: Cos to cut prices by Rs 5 per 50-kg bag from Mar
The Economic Times, February 25, 2009, Page 11

CEMENT prices in India will drop Rs 4-5 for every 50 kg-bag from March 1, following Tuesday’s excise duty cut. Executives of leading cement makers like Grasim Industries, ACC, Shree Cement and Binani Cement said the duty cut will be passed on to customers. In a move to boost infrastructure projects and construction activity, the government has cut excise duty by 2% on bulk cement. Once the companies announce a price cut, cement prices will drop to Rs 222 in key markets like Mumbai while it will vary between Rs 210 and Rs 230 in other regions, according to industry circles. At present, a bag of cement costs Rs 215-235. According to Binani Cement MD Vinod Juneja: “Prices will reduce by Rs 4-5 per bag as companies will pass on the benefit. A slowdown in the property market will also help to bring down prices.” The real estate sector accounts for nearly 60% of India’s cement demand. Ambuja Cements MD AL Kapur also said the duty benefit would be automatically passed on to bulk cement traders. The country’s two largest cement makers, the Aditya Birla group and ACC, have called meetings to take stock of the situation. Grasim Industries whole-time director & CFO DD Rathi said, “We are studying the entire thing and if required, will take a decision on pricing in the next few days.” However, the 2% duty cut has not cheered cement companies in south India as bulk cement accounts for a small portion of their overall revenues.
TEAM ET