New Delhi: Cement prices in India have remained stable for the past few months and are expected to be “reasonable” in the near future, helped by capacity expansion and imports, an industry ministry official said.
“Cement prices have been stable for quite some time,” Ajay Shankar, a secretary at the industry ministry, told reporters after a business conference on 27 November.
“Cement industry is undergoing rapid expansion. With new plants coming on stream and liberal import regime, we hope the situation will be reasonable,” he added.
India faces a shortage in cement as hectic construction activity in the rapidly growing economy boosted demand by 10%, while domestic supply increased at a sluggish pace of 4.9% until September.
During 2005/06, cement prices surged 50% from a year earlier.
But it stabilised after June this year, following the onset of monsoon and also due to the arrival of imported cement from Pakistan.
India allowed duty-free import of cement from Pakistan in June this year.
India’s top cement producers Grasim Industries Ltd, UltraTech Cement, ACC Ltd and Ambuja Cements Ltd are running almost at full capacity.
ACC and Ambuja Cements are both partly owned by Switzerland’s Holcim.
But Indian firms plan to add 100 million tonnes in capacity by 2010 at a cost of Rs40,000 crore.
Demand is expected to remain robust as Asia’s third-largest economy pours money to upgrade its creaky infrastructure such as national highways, airports, ports and for housing and office space.