Real estate firms turn to Pak, B'desh for cement

With cement prices continuing on their upward spiral, real estate developers in Tamil Nadu have resorted to imports from neighbouring Pakistan and Bangladesh to bring down costs.

"A group of builders have already begun importing cement from Pakistan via the Kochi port... Around 20 containers have already reached Kochi. I think this is one of the better modes of importing cement, as the cost has escalated", a top official of the Confederation of Real Estate Developers Association of India said on condition of anonymity.

He said the cost of an imported 50-kg cement bag worked out to Rs 190 (in Kerala), compared to Rs 295 in Tamil Nadu.

The steep prices have even led to many developers putting their projects on the back burner, a top official of the Builders' Association of India said.

He said the price of a 50 kg bag of cement rose from around Rs 270 last week to Rs 295 per bag this week. "The central and state governments should intervene and take steps to bring down the price of cement...," Builder's Association of India (Tamil Nadu unit) Honorary Secretary T N Chandrasekaran said.

He said that builders plan to stage an agitation in Chennai on October 28 to highlight their demands.

"We have been asking the government to take some steps for this industry. But they have not done so and therefore we plan to conduct an agitation in Chennai on October 28," he said.

Chandrasekaran said many developers have put their projects on hold, but those with delivery commitments had to procure cement at higher prices.

He said they were left with no other option but to import cement from neighbouring countries to reduce costs and any builder planning to do so would immediately look at Pakistan and Bangladesh, as some of the cement is of good quality.

"But I don't think any developer would take that effort right now as you can't import meagre quantities. Builders will have to import a minimum of 2,000 to 3,000 million tonnes, not feasible for many of them," he said.

Builders that were able to utilise such massive quantities would be able to get cement bags for around Rs 160-170 only, he said. "But the process for importing it is not easy. There are so many formalities before importing," he added.

An industry source said cement demand in Tamil Nadu, Kerala and Karnataka this year was 57 million tonnes and was expected to touch 67-68 million tonnes in 2011.