TN govt warning works, cement companies spell out price cut

A week after the Tamil Nadu government's warning that private cement companies in the state would be taken over if they did not lower prices immediately, the manufacturers today offered to make available two million bags of blended cement every month in all districts at a subsidised rate of Rs 200 per 50 kg bag.

Top executives of cement manufacturers India Cements, Madras Cements, Grasim Industries, Associated Cement Companies, Ultratech Cement, Dalmia Cement and Chettinad Cement met Chief Minister M Karunanidhi today and submitted the proposal.

The companies have agreed to adopt districts near their areas of operation for selling subsidised cement to economically backward sections and lower middle class. The quantities each company would sell districtwise would be submitted separately, said the letter.

The cement bags will be delivered to consumers against permits to be issued by district officials, according to the proposal. The producers outside the state but supplying cement in Tamil Nadu would also do so, said the statement.

According to the agreement, consumers will need to get their construction plan by district officials to procure cement at Rs 200 per bag. Officials will issue permits to cement firms based on a thumb rule that construction projects over 500 sq ft will require about 200 cement bags.

Since the aim is mainly to cater to the economically backward sections, the maximum quantity per individual may be limited to 400 bags for constructing a structure over up to 1,000 sq ft. District officials may alos hold a review meeting with cement producers at the end of every month.

Cement manufacturers have also agreed to reduce the price of cement bags committed to the Tamil Nadu Cements Corporation (Tancem).

They propose to supply 1.4 million bags of cement per month to Tancem at Rs 220 per bag as against the earlier price of Rs 230 per bag.