Cement manufacturers in South India form Association on their own
The newly-formed South India Cement Manufacturers' Association (SICMA) will be headed by N. Srinivasan, Vice-Chairman and Managing Director of The India Cements Ltd.
Hyderabad: Cement manufacturers in South India have decided to come together to form an association of their own.
The newly-formed South India Cement Manufacturers’ Association (SICMA) will be headed by N. Srinivasan, Vice-Chairman and Managing Director of The India Cements Ltd. Ravinder Reddy, Director, Bharathi Cements, will be the Vice-President. Krishna Srivastava, Director, Penna Cements, will be the Secretary of SICMA.
According to N. Srinivasan, the formation of a south Indian body is necessitated since the country is large in size and various state governments are embarking on a massive effort to beef up development on the infrastructure front.
Addressing a virtual press conference the office-bearers of the newly-floated association have debunked the charges made by real estate developers and builders. They have accused the cement industry of jacking up prices. The members point out that cement formed a minuscule part of the per square foot cost of a construction. The cement industry mandarins have accused the developers and contractors alike of indulging in diversionary tactics to avoid tax scrutiny.
The formation of a new association comes at a time when the cement industry in this part of the country is locked in an intense fight with real estate developers and contractors who have consistently accused the former of jacking up prices.
The tug-of-war between them has been escalating for quite some time now. So much so, the Union Road Transport Minister, Nitin Gadkari, too, has been roped into the scene by the builders’association.
At a meeting organised by the builders’ association, Gadkari even indicated that he would take up the issue with the Prime Minister.
The newly-formed SICMA, however, sees a “pattern in builders’ raising a bogey of increasing cement and steel prices” to deflect the attention of the administration.
The formation of an independent regional body assumes considerable importance especially since there is already a Cement Manufacturers’ Association (CMA) at all-India level.
Does it mean that CMA has not effectively articulated its views? Of late, CMA seems to have sort of lost its sway over its members, who have multiplied over a period and have focussed on building their own empire.
Yet, the Competition Commission has often slapped penalties on many cement companies for ‘cartelisation’.
N. Srinivasan, in fact, has played a lead role in CMA. Often, he has actively represented the voice of the cement industry in South India. In fact, he was instrumental in hammering out successive industry-wide wage accords with the cement unions across the country.
The installed capacity of cement in India is close to 550 million tonnes. This translated to around 7% of the global installed capacity. India is next only to China in terms of cement capacity. South India accounts for a significant share of limestone deposits. Ipso facto, the South will be the key for the Modi government’s ambitious plans on the infrastructure development front.
For, much of the cement supply for that will have to come from this part of the world.
For Srinivasan, it is a return to limelight yet once more. And, he is right back at a time when an industry like the cement – especially in the South – is caught in a pincer-like situation. On the one hand, there is poor demand, on the other, there is over-capacity. Cement is a long-haul game, and not a sprint race. Given the current imbalance and considering the trying times, the industry appears to be at a cross-road.
Srinivasan became CMA President in 1991 after total decontrol of cement
industry in 1989 followed by the liberalisation in 1991. He was CMA President for five terms (during 1991-1994 and again during 2004- 2006). He had been very active in CMA.
The moot question is: What will be the role CMA now? Will SICMA act independent of CMA going forward?
Observers see in the formation of SICMA an effort to rediscover direction collectively. With SICMA, what will happen to CMA? Well, the industry is heading of an interesting time.
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