Prices may go up by Rs 10 per bag.
Soaring input costs have forced mini cement units to go for a price hike despite sluggish demand due to monsoon. The cement manufacturers are planning to increase prices by Rs 10 per bag.
Presently, of the 150 mini cement production plants located in Gujarat only 75-odd units are functional. With fewer orders expected in the ongoing monsoon season, the production has been curtailed to 3,500 to 4,000 tonnes a day.
“Small units have smaller orders in comparison to leading companies. Besides, higher input cost puts tremendous pressure on the mini cement manufactures,” said Pravin Patel, vice president, Mini Cement Manufacturers’ Association.
Coal prices, which have doubled in the past six months, have put pressure on the margins. Besides, increased prices of limestone and higher transportation costs too have lead to a price hike. In March, the coal prices were in range of Rs 3,500 per tonne, which is Rs 7,000 per tonne at present.
As the monsoon has put breaks on demand, most manufacturers have stopped production, say industry sources.
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While referring to the price hike, he said, "The manufacturers will convene a meeting by the end of this week. The prices are expected to be increased by Rs 8 to Rs 10 per bag. At present, mini cement is available in the price range of Rs 170 to Rs 205 per bag."
According to Mansukhbhai Patel, president, Gujarat Mini Cement Manufacturers’ Association, though the cement manufacturers have proposed price hike twice, they have not been able to implement it.
“The decision would be taken after the meeting. The price hike in range of Rs 10 per bag is inevitable," he said.