Cement price will rise as cost of coal is up, says India Cements

: The India Cements Ltd on Wednesday said price of cement would increase as every cement factory faces "pressure on cost" and the industry was suffering from the huge impact of rise in coal price.

"The rise in cost (of coal) has taken place....the price of coal we were getting was about USD 70-80 per tonne and went up to USD 105; and from there it went to USD 135. Now, it is USD 250 per tonne," said vice-chairman and managing director of the cement-making company N Srinivasan.

Elaborating on this, he said the company was prudent as it has coal of about four lakh tonne which can produce 27 lakh tonne of cement clinkers. "We have four months of stock, but beyond that we are looking at the higher costs of coal. This will apply to everybody (every cement-maker) not only us (The India Cements)," Srinivasan, also managing director of the company, told reporters.

 

Noting that the rise in cost of coal affects cost of power generation and cost of fuel at the kilns, he said.

"If you take cement industry, some people have got one week's stock, (but) we have got four months' stock. Companies that are well stocked can rely upon steady production in the coming months," he said.

"But today, if you step out to buy coal, it will really impact (your) cost of production. It is my estimate that already prices of cement have moved up, the increase in cost of production can be passed on (to customers) by a prudent manufacturer," he said.

To a query on whether he would foresee pressure from the governments to increase cement prices, he said, "TANCEM (State-owned Tamil Nadu Cement Corporation) has increased the price and all I know that TANCEM has recognised the increase in costs, and has increased the price."

To another query, he said, "I am surviving because I have coal which have been bought at lower cost. When it sells USD 250 coal, I will have to increase the price by Rs 30-Rs 40 a bag easily", he said.