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Builders look at cheaper imports

Builders look at cheaper imports
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First Published: Thu, Apr 05 2007. 12 14 AM IST
Updated: Thu, Apr 05 2007. 12 14 AM IST
Mumbai: While cement manufacturers still remain undecided about whether or not to drop prices in response to the threat of imports, they may be forced to do so by builders who are planning to import cheaper cement in bulk. And bulk it will have to be. A recent report on the cement industry by Mumbai-based brokerage house ASK Raymond James & Associates Pvt Ltd says builders will need to import at least 25,000 tonnes for it to be economically viable.
A prominent Mumbai-based builder, who did not wish to be named, said the members of the Builders Association of India and Maharashtra Chamber of Housing Industry (MCHI) have expressed interest in coming together as a loose consortium to import cement. Confirming the move, Mohan Deshmukh, MCHI’s president, said, “We have been talking among ourselves to look at bulk import of cement. We are still finalizing the plan.”
Importing the commodity is one thing. Using it in time, too, matters. The shelf life of cement is not more than 45 days, says the brokerage’s most recent report. This means several builders with large projects under implementation have to come together to import the bulk commodity which can be consumed in time.
Bandish says the MCHI was studying the feasibility of importing cement even before the 16% countervailing duty on imported cement and the 4% additional customs duty on imported cement was removed. “After the removal of all import duties, we are now seriously working on imports,” said Bandish.
However, A.K. Saraogi, chief financial officer of J.K. Cement, said while imported cement would get cheaper by Rs22-23 a bag, it would still be more expensive than the domestic product. That’s not stopping the builders. “We have already got quotes from countries such as Korea, China and Indonesia. We have to see how much cheaper it will be to get the cement at the points of consumption,” says Bandish Ajmera, director of the Mumbai-based Ajmera group of builders.
Bangalore-based regional major RMZ Corp is also looking at importing cement for its projects. “We are considering it (imports) as the Indian cement industry is not cooperative in reducing the prices as requested by consumers and the finance ministry,” said Viswanatha K.N., senior general manager, contracts, RMZ Corp. in an emailed response. RMZ Corp. consumes 10,000 bags of cement a day, across sites in Chennai, Bangalore and Kolkata.
The list of those looking at the imports route is growing. “We are looking at importing a shipload of cement either from South Korea or China,” says Sunil Mantri, chairman and managing director of the Mumbai-based developer, Mantri Group. The New Delhi-based DLF Group too is mulling imports for its port-based projects, the company said in an emailed response.
PTI also contributed to this story.
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First Published: Thu, Apr 05 2007. 12 14 AM IST
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