Cement firms deny cartelisation move

Addressing a press conference on behalf of the industry today, N Srinivasan, the vice-chairman and managing director of India Cements, the largest cement player in the South, said : "Cement is a decontrolled industry. Price is determined by market forces and the price fluctuation is normal. Nobody asks when price falls below the uneconomical level where even duties and material costs are not covered. When it comes back, everyone starts questioning. Too much is made out of this."

He said that Crisil in its study conducted in the year 2000 suggested that the cement price should be around Rs 165 per bag in Hyderabad, if the industry was to survive and grow.

Pointing to the situation in August when cement price was about Rs 85 a bag as compared to the current price of Rs 155 in Hyderabad, he felt that, " if the Rs 85 price had continued for another 6 months, every factory would have been closed down."

"There is a minimum price below which you can't sell cement and service debt. We are trying to approach that level. If you want to set up a new plant, today's price will not support," he added.

Indicating that the price is likely to be stabilised at the current level with minor variations, Srinivasan said that "when there are 50 companies and 150 cement plants in the country, cartelisation won't work out. At the end of the day, we are all competitors."