Builders cry hoarse over increase in cement prices

The builders lobby also said will petition about the increase in cement prices with the State Government as well as Competition Commission of India later.

By Author  |  Published: 18th Apr 2017  9:13 amUpdated: 18th Apr 2017  11:53 am
Cement accounts for 15 per cent cost of a project

Hyderabad: Real estate developers and builders community have threatened to import cement to meet the demand if cement manufacturers do not cut down the prices of the building material. They allege that the increase was about 60 per cent over the prevailing prices as of March.

The builders lobby also said will petition about the increase in cement prices with the State Government as well as Competition Commission of India later.

Cement in Hyderabad and surrounding areas till March was priced around Rs 250 a bag, varying with brand and logistics. Now, the current price is around Rs 375 to Rs 400 a bag. This was putting pressure the developer and builder community as cement accounts for about 15 per cent of the total project. The increase in cement prices would increase the construction costs by Rs 60 per sqft, thereby affecting the affordability of the projects.

On Monday various industry bodies- Credai, Telangana Real Estate Developers Association, Telangana Builders Federation and Telangana Developers Association- have come together on a common platform Joint Action Committee to raise concern over the increase in cement prices.

“Residential as well as infrastructure project will be hit due to the revised prices. The JAC sees the revision as steep and asks the cement manufacturers to roll back the prices to March end levels,” said S Ram Reddy, president, Credai Hyderbad and chairman of JAC, which has about 600 developers and more than 1,000 contractors.

JAC convener G Ram Reddy said the developers and contractors are not in a position to absorb the increase in prices and at the same time cannot be passed on to the endusers. The increase in cost will lead to loss in real estate sector losing momentum and prices will be escalated artificially.

Telangana and Andhra Pradesh with 20 manufacturers contribute about 26 per cent of the total installed cement capacity of the country. Annual consumption of cement in Telangana and AP is about 24 million tonne. The steady demand for cement does not warrant a hike in the price of the cement. The JAC said if they import cement, the landing costs will be lower than the domestic cement, they said.

A similar situation was enacted in 2014, when the developers and builders said they would look at the possibility of them setting up a cement plant in a consortium. However, that proposal did not take off. “We have no plans to set up a cement plant. We understand the economics of the sector and we only request to give cement at a reasonable price so that the ongoing and future projects are not affected,” said Credai Hyderabad president Ram Reddy.

Credai Hyderabad general secretary R Ramakrishna Rao, TREDA president P Ravinder Rao, Telangana Developers Association president GV Rao, Telangana Builders Federation president C Prabhakar Rao, Builders Association of India vice-president SN Reddy and others too voiced the demand for the rollback of prices.

Efforts to get views of cement manufacturers on the issue did not materialise.