Coal prices putting pressure on cement

This might impact the affordable housing segment. Among others, the fluctuations in the fuel prices too is making the freight costly.

By Author  |  Business Bureau  |  Published: 17th Dec 2018  7:58 pm
This might impact the affordable housing segment. Among others, the fluctuations in the fuel prices too is making the freight costly.

Hyderabad: The cement industry is facing pricing pressure due to increase in the coal and freight prices. Also, the GST on cement has not helped the industry deal with the pricing issues. The price per cement bag in Telangana now ranges from Rs 280 to 320.

“If the coal prices do not stabilise at a particular level, we will not be able to absorb the increases. We will have to pass on the burden to end customers and as a result the prices of cement in the retail market might go up. However, we will wait for about four months to take a decision on pricing,” said Atul Priyadarshi, Sr AGM, Planning and Development, Vicat (France).

This might impact the affordable housing segment. Among others, the fluctuations in the fuel prices too is making the freight costly. Most of the cement is transported through road. Though transport through rail is cheaper, reaching the last mile was possible only through road, he said.

The industry has drawn up plans to increase the capacity in Andhra Pradesh from the current about 40 million tonne per annum by another 10 million tonne in five years. This could mean an investment of over Rs 5,000 crore over five or more years, he said.

“Several companies have grown between 15 to 25 per cent last year. There was a slight slowdown in the demand in the last few months and that could be due to the election fever. With a stable Government now in place, we hope that we will grow more than last year,” said D Sai Samba Siva Rao, representing JK Cement.

Meanwhile, infrastructure industry body First Construction Council will conduct the tenth edition of Cement Expo, an international conference and exhibition together with Indian Cement Review magazine on December 20 and 21 at Hitex. Companies like ABB, ACC, Ador Fontech, Ambuja, Beumer India, Bharathi Cement, BHEL, Cladreys India Refractories, Dalmia and others will participate in the two-day event, council president and founder Pratap Padode.

Cement Expo will serve has one-stop platform to source cement, concrete, equipment, construction and infrastructure technologies, products and services. The event will also highlight challenges of the construction and infrastructure industry. It will spell out the vision for the segment for the next 12 years.