Cement Sector


“Once the import hurdles are cleared, the price of a bag of cement will drop to Rs. 140 from Rs. 251”, says Mr. Anand Gupta, Chairman, Builders’ Association of India, Mumbai Centre.
The present installed capacity of Indian Cement Industry is 171.34 million tonnes including mini cement plants spread over 130 cement plants owned by 52 cement companies. Consolidation process in the industry initiated since last 4/5 years has given 21.70% of market share in hands of multinational cement company Holceim of Switzerland, which controls Gujarat Ambuja and A.C.C. Kumar Birla Group of Companies, (Grasim and Ultratech) holds 19.40% market share. In addition India Cement holds 5.50% market share. These three group of companies control 46.60% of market share and 5 are in a position to control supply and price. It is pertinent to note that after entry of multinationals in Cement Industry, period of cartelisation started from January 2006 causing cement price to move from Rs.164/- per bag to Rs.250/- as on date.
Cement is one of the main raw materials for all construction works; any upward revision in cement price affects the fortune of Construction Industry. Increase in cement price was without any increase in excise duty, limestone, royalty, sales tax, railway freight, or demand supply mismatch.
If the Pakistani and Chinese cement make their way to the Indian market, a bag of cement which costs Rs 251 in Mumbai will be as low as Rs. 140 per bag. The Builders’ Association of India and real estate agencies have been demanding the abolition of hurdles in importing cement. The BAI has pleaded with the centre through a letter for the removal for the hurdles.
In a letter to the Union Commerce and Finance Minister, BAI has asked to clear the consignments of the cement imported from other countries.
“For the import of the cement, manufacturers are bound to register themselves with the Bureau of Indian Standards (BIS) and since the compliance is lengthy and cumbersome, the consignments which are lying at the ports for the past few months could not have been cleared. If the government removes the barrier of BIS certification, then the cement will be available @ Rs 140-160 per bag in all the major cities of India”, quotes Mr Anand Gupta.

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