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Cement makers to spend Rs450 bn on capacity

Cement makers to spend Rs450 bn on capacity
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First Published: Tue, Mar 06 2007. 03 53 PM IST
Updated: Tue, Mar 06 2007. 03 53 PM IST
Bloomberg
New Delhi: Cement makers have promised to invest Rs450 billion on adding close to 100 million tons of capacity, a government official said.
The companies plan to raise output in the next five years, Ajay Dua, secretary in India’s department of industrial policy, told reporters in New Delhi today. India now has a cement-making capacity of about 165 million tons a year compared with neighbouring China’s capacity of more than 1 billion tons.
“Increasing cements imports will not help lower prices of the building material,” Dua said. Imported cement is expensive, besides which India doesn’t have dedicated terminals to handle cement shipments, he said.
Indian cement makers are today scheduled to meet Finance Minister Palaniappan Chidambaram for the first time after rejecting the government’s request to scrap price increases arising from higher excise duties, Dua said. Chidambaram’s office said no such meeting was planned today.
Chidambaram imposed a dual tax rate on cement in his 28 February budget to persuade companies to limit price increases. The excise rate was raised to Rs600 from Rs400 a ton on cement sold at Rs190, or more, a 50-kilogram bag. For cement priced below Rs190 a bag, the tax was cut to Rs350 a ton.
Indian cement makers have passed on the increase in duties to its consumers across the nation, H.M. Bangur, vice president of the Cement Manufacturers’ Association of India, said in a phone interview from New Delhi on 5 March.
Chidambaram cautioned cement makers about acting as a cartel on pricing, Press Trust of India reported on 3 March, citing an interview with the minister.
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First Published: Tue, Mar 06 2007. 03 53 PM IST