South India is now facing construction problem as cement price increased 40% in the last one month.

Sudeep Savanth, Chennai

8th January 2015

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Replies (3)

The construction industry has reacted strongly to the cement price hike, with CREDAI and ACCE saying it will result only in project delays and escalation in prices.

highrise, Mumbai

19th March 2015

Comment

Hi Mr Sudeep,

Cement manufacturers say they are under severe cost pressure owing to lower utilisation of their manufacturing capacity. Increase in input costs like coal, power and transportation had crippled the industry and slashing prices would be suicidal.
Moreover, for every bag of cement sold at around 370, cement manufacturers pay 140 as VAT, excise duty and freight charges. There are other overheads too and manufacturers hardly make any money.

Abhineshwaran, Chennai

8th January 2015

Comment

Hi Guys,
I heard from news that ,Builders' Association of India, CREDAI, Valuers' Association of Tamil Nadu and Engineers' Association of Tamil Nadu and other allied organisations have called for a statewide agitation including observing a day-long fast on January 6, demanding that government rein in cement prices.

Srinivas , Chennai

9th January 2015

Hi Sudeep,
At a time when cement is sold at 245 per bag of 50kg across northern and western parts of India, in the four southern states alone, the price has gone up by 100 per bag. The cement is now sold at 340 per bag to institutional buyers and at 375 per bag to retailers. The impact on the budget housing segment in Chennai is a cost escalation of 2.5-3% per sq ft of built-up area.

Hemanth, Chennai

8th January 2015

Comment

@ Mr Sudeep,

Yes Mr Hemanth, I agreed with your comment. Many builders are trying to cut down costs to deliver apartments to low income groups in Chennai's suburbs at 2,000 per sq ft. An increase of 100 per bag of cement works out to an increase of 50 per sq ft in cost of construction. On a 600 sq ft apartment, the cost escalation is 30,000 and it is big money for that segment.

Tilak, Chennai

8th January 2015

Hi Guys,
As per my knowledge, cement manufacturers had increased price of even bulker cement by 40% in a month. Bulker cement is purchased by makers of ready-mix concrete. Cement manufacturers cut down production to increase cost.

Guruprasad, Chennai

8th January 2015

Hi Sudeep,

In my point of view, this is definitely a big problem for builders & developers. Even now people will face more problem as builders will say project got delay due to hike in cement price.

I came to know from different sources that, many government infrastructure projects had slowed down owing to hike in cement price. People in the construction industry may have to look at setting up permanent berths at Krishnapattinam and Karaikal ports to import cement from Indonesia. Imported cement will cost only 200 a bag.

Anil Kumar, Chennai

8th January 2015