Small players to hike cement prices in Gujarat

Small cement plants in Gujarat have decided to hike prices by Rs 12 per bag of 50 kg effective April 1.

In a recently held meeting, members of the Gujarat Mini Cement Manufacturers Association decided to raise prices in the wake of rising prices of clinker, furnace oil, coal as well as diesel.

Gujarat has 90 operational mini-cement plants with a production capacity of 5,000 tonnes per day. They charge Rs 165-170 per bag at the lower end and Rs 185 per bag at the higher end.

However, the Union Budget increased the central excise on clinker by Rs 100, due to which production cost has increased by Rs 6 per bag. This apart, a 2.5 per cent increase in VAT has also led to a rise of Rs 5 in input cost along with higher prices of diesel.

Industry players said the hike by mini-cement plant owners was inevitable as they had to compete with large cement companies.

"An increase of Rs 2,500 per tonne in the prices of furnace oil and rising coal prices have left small cement manufacturers with no choice but to increase the prices of end products. Taking all the factors into account, a price hike was imminent," said Pravin Patel, vice-president, Gujarat Mini Cement Manufacturers Association.

It may be mentioned here that the government has decided to purchase cement at a premium to promote small industries. However, government departments have so far stayed away from buying cement from mini cement manufacturers.

Tax burden on all the cement manufacturers is the same irrespective of their size, which is also a cause for concern for these small cement manufacturers.