Telangana, AP real estate developers to stop purchase of cement for a week

Telangana and Andhra Pradesh together account for purchase of 20,000 tonnes of cement a day

The cement manufacturers were stated to have hiked the price of a 50 kg bag by Rs  30 in Kerala, Rs 40-50 in Karnataka, Rs  60-70 in Tamil Nadu and around Rs  100 in AP and Telangana

Real estate developers of Telangana and Andhra Pradesh, like their counterparts in Tamil Nadu, have decided not to purchase cement for a week from July 5 in protest against a steep hike in the price by the manufacturers.

The two states together account for purchase of 20,000 tonne cement a day. The cement manufacturers were stated to have hiked the price of a 50 kg bag by Rs 30 in Kerala, Rs 40-50 in Karnataka, Rs 60-70 in Tamil Nadu and around Rs 100 in AP and Telangana.

The cement companies were observing a “despatch holiday and we in turn want to observe a purchase holiday”, said members of the joint action committee (JAC) of various real estate developers associations, including the Confederation of Real Estate Developers Associations of India (Credai) and the builders associations of Telangana and AP.

The real estate developers of Tamil Nadu have stopped purchasing cement as part of their week-long protest from June 30 to July 7 against the price hike.

Addressing a press conference here on Wednesday, Credai national president, C Shekar Reddy, said the confederation would approach the Competition Commission of India against “cartelisation” by cement manufacturers.

He alleged the cement manufacturers were stopping despatch of cement from their godowns and creating “artificial shortage” of the crucial building material “which is akin to black marketing”.

“I don't know why the government is keeping silent,” Reddy said, adding there was no need to hike prices now as there would be slump in construction activity during the monsoon season.

Credai Hyderabad general secretary, S Ram Reddy, said the hike in cement prices to Rs 310-325 a bag was unjustified as there was no change in taxes or any significant change in the cost of inputs for cement.

JAC co-convenor, SN Reddy, emphasised the need for setting up a ‘Cement Regulatory Authority’ to monitor the industry.

Cement manufacturers, however, told Business Standard that the hike was “absolutely necessary for us to survive”. In this regard, they pointed out that there was hike in rail freight charges and the prices of diesel and coal. Added to this was frequent power cuts, which led to an increase in the cost of production.

The manufacturers said they had sold cement at a reduced price of Rs 180-195 a bag during the run-up to the bifurcation of AP as there was no demand as almost all construction activity came to a standstill. Prior to this period, cement was sold at Rs 330 a bag, at the same price as today, they pointed out.

“ They (the real estate developers) all came together on one platform. How can they blame us now for being together?”, a cement manufacturer, who did not want to be named, said when asked about charges of cartelisation.