Continuing its upward spiral, the price of cement has gone well beyond the Rs.400-a-bag mark. On Wednesday, the billing price of a bag of cement (50 kg) at hardware stores across the city was Rs.420.
This is far above the average price of a bag of cement in New Delhi, Mumbai and other metropolitan cities. However, the price in Bengaluru too is high, close to Rs.400 a bag, sources in the construction industry said.
The steep increase in the cost of cement, the construction industry on Monday approached the Competition Commission of India (CCI), seeking its intervention in the issue. They have submitted that despite a steady dip in the cost of raw materials used in the manufacture of cement over the past six months, there has been an increase of over 25 per cent in cement price since August. This is also impacting the cost of construction of homes, especially smaller units, they said.
A leading stockist in the city said that though cement constituted less than 10 per cent of actual construction, blaming the manufacturers alone for increase in cost of building homes and apartments was not right. He pointed out that cement manufacturing plants were currently operating at capacities far lower than their full potential and this was an important reason for the current problems. They also said that not just cement from private companies, even Arasu Cement from Tamil Nadu Cements Corporation Ltd. (TANCEM), which for long, was far cheaper than the rest had now become expensive, selling at Rs.380 a bag.
However, builders respond that it is still a puzzle that cement costs have always been very high in Chennai compared to the rest of India. CREDAI (Confederation of Real Estate Developers' Associations of India)’s Chennai representatives said they had shared the details of their study to their national head office, who had made the submissions to the CCI and they were waiting for a turnaround in the situation for the better. A civil engineer said those hit hard by the unending price of cement were middle- and lower-income groups buying just a few hundred bags of cement. “A reduction of even Rs.50 per bag will result in significant savings to them,” he added.
Construction industry claims
Steady dip in raw material costs over past six months
Still there has been an increase of over 25 per cent in cement price since August
This is impacting the cost of construction of homes, especially smaller units
Cement constitutes less than 10 per cent of actual construction, so manufacturers responsible for higher costs
