A committee headed by the Cabinet Secretary is considering ways to augment supplies from the southern parts of the country to the northern and eastern parts using multi-mode transport.
This was followed by Finance Minister Nirmala Sitharaman’s announcement on Saturday, when she said in a series of tweets, related to measures to contain inflation, “measures to improve cement availability and reduce costs through better logistics.” are being done. cement. Along with steel, cement accounts for around 30 per cent of the new construction cost.
A top government official listed various reasons for the high price, including insufficient supply and reporting of cartelisation. Also, the installed capacity is lying idle in some parts of the country. Now, the issue here is that clinker units are generally located close to limestone quarries or sources as limestone cannot usually be transported over long distances. So, the issue here is the transportation of cement from areas where there is a supply crunch where there is idling capacity.
cement manufacturers request
The official said that recently cement manufacturers from the southern region made a presentation to the central government and said that they have idle capacity. He asked for review of railway rakes and telescoping charges. The official said that now the effort is to bring down the transportation cost.
“One such proposal is to use a sea port in southern India to transport cement to a port on the eastern side, says Haldia. From there, it will be taken to a city like Varanasi using inland waterways and then finally using the road to the final destination,” explained the official.
The all-India average cement price rose by ₹25-30 per 50-kg bag or 8.1 percent month-on-month (MoM) in April 2022, hitting its lifetime high after rising ₹390 per bag in the previous 12 months. Increases. , The price hike by cement companies at the beginning of the month has largely been sustained to contain cost inflation. Dealers in select regions/states are suggesting potential increase of ₹10-20 per 50-kg bag in the current month
After a decline in demand in Q3FY22 (October-December), Q4 (January-March) witnessed some better demand. Research agency Crisil said demand grew 20 per cent in the first half of FY12, but experienced an unexpected slowdown in the second half due to unseasonal rains, sand issues and non-availability of labour, which brought it down to 7 per cent. Pulled- year growth for the full fiscal year.
In FY23, cement volume growth is expected to be in the range of 5-7 per cent, driven by demand for affordable housing from tier-2 and tier-3 cities along with infrastructure. However, higher construction costs may limit the increase in demand.
Published on
25 May 2022