N. Srinivasan, vice chairman and managing director of India Cements, feels that making politics out of the cement industry is not fair. In the last few months, builders, developers and politicians have been up in arms against cement makers regarding the price hike.
But cement companies have always been stating that rising costs of manufacturing requirements such as transport, power has crippled them and companies need to keep an eye on their bottom-line.
“Only half a bag of cement is used per square feet. If one bag of cement costs Rs. 370, it works out to only Rs. 185 per square feet. Therefore, the share of cement cost in a building is minimal. The cement price has not gone up much considering the steep escalation in the cost of an apartment. Not just that. Cement constitutes only 4-5 per cent of the total cost of residential projects,” said Mr. Srinivasan.
“For every bag of cement, keeping the base price as Rs. 370, cement makers pay the State Rs. 48 as VAT, Rs. 49 as excise duty, and incur a freight cost of Rs. 40. Apart from this, there are several other overhead costs. So, I hardly make anything out of this. We are reeling under nil growth,” he pointed out.
“The cement industry has stood by the government and supported the economy in the development of the country from Independence to now,” Mr. Srinivasan added.
He also felt that the cement industry had to be understood in a proper way. “The purpose of my meeting is to highlight the plight of the cement industry and I have nothing personal against anyone,” he said.
