Telangana cement makers agree to cut prices by Rs20
Jul 24 2014
The builders, who are bulk purchasers of cement, have imposed a purchase holiday on cement from July 5 protesting the hike in the prices of the cement. A joint action committee comprising builders and developers was formed in view of the increase in the prices.
On the other hand, cement manufacturers too have said that the action of the builders to impose a purchase holiday was unwarranted. The cement makers said they were incurring losses due to the increase in the cost of raw materials and freight costs and needed the hike in prices.
With builders not buying cement, it needed the intervention of the top government officials to reach the understanding. The decision to reduce the prices was taken on Wednesday evening.
The cement manufacturers and members of builders' joint action committee have come to mutually agreeable resolution on issues of cement supply and pricing, said JAC chairman C Shekar Reddy.
“We never wanted to get into a confrontation mode. We only said price rise is necessary to ensure that there are no losses,” said a cement manufacturer adding that the reduction in the prices would be for bulk buyers only, who should pass on the benefit to their customers.
Also, some builders actually did not buy cement from Hyderabad or other parts of Telangana but bought it from Karnataka and Maharashtra. They were able to get cement on CST of 2 per cent whereas the cement makers here paid value added tax at the rate of 14.5 per cent on cement sales in Telangana, the cement manufacturers said.
Depending on the markets they serve, cement manufacturers either opt to sell to the builders directly or depend on the dealer network for the sales. ”We sell most the supplies through the dealer network. Bulk sales account for a very small proportion for us,” said K Ravi, managing director of NCL (Nagarjuna Cement).