Developers to directly import cement

Owing to local cement producers' decision to not drop the cement prices, city developers have decided to go in for direct import of cement. Many of them have already begun the spadework on acquiring licences for import of cement.

The cement manufacturers had recently refused to cut cement prices even after the government abolished 16 per cent countervailing duty (CVD) and special additional duty (SAD) on cement to make imports of construction material duty free.

As of now, the developers are buying cement from local manufacturers but are simultaneously speculating on the possibilities of direct import.

"We are very worried because after the hike, the prices have become unaffordable. We are now thinking of importing cement ourselves and have already begun talks with a Chinese company. We are also working on the cost of importing cement," said Jateen Gupta, Director, J P Infrastructure Pvt Ltd.

According to Gupta, the cement prices have shot up 25-30 per cent which has affected their project cost eventually. J P Infrastructure is in the process of building what it claims is the biggest shopping mall of Gujarat at Ahmedabad called 'ISCON Mega Mall'.

Under the same brand name of ISCON, the company has undertaken several commercial and residential projects and is a leading construction and developing player in the state.

"Although we are not sure if importing cement would be much cheaper than buying it locally or not but as of now, import remains our only other option since buying cement is getting too expensive for us to cover our project costs. Costs for all of our projects have shot up by 15-20 per cent due to the price rise," said Ashish Desai, Senior Manager-Purchase, Saumya Construction Pvt Ltd, adding that the company is hopeful to get cement imported at less than Rs 200 per 50 kg bag.

However, Gupta states that importing cement carries another problem of its own; of loading. "The cement is usually imported in containers and not bags. So loading and unloading is a problem for us since the construction community is used to consuming cements in bags. We have to incur extra cost in loading cement into bags from those huge containers which eventually nullify the savings in project costs through imports," said Gupta.