The Hindu Business Line : `Look at price aspect to boost cement demand'

Mr E.V.K.S. Elangovan, Minister of State for Commerce and Industry, flanked by Mr B.L. Jain (left), President, Cement Manufacturers' Association, and Mr N. Srinivasan, CMA's newly-elected President, at the association's 43rd annual session in the Capital on Wednesday. - Ramesh Sharma

New Delhi , Sept. 22

THE Government has called for the need to bridge the gap between selling price and the production cost of cement to give a boost to rural housing demand.

Addressing the 43rd annual session of Cement Manufacturers' Association (CMA) here, the Minister of State for Commerce and Industry, Mr E.V.K.S. Elangovan, said that both the industry and Government needed to sit together to look into the reasons for the existing gap. The total impact of taxes and duties, according to some estimates, is over 80 per cent of the ex-factory cost of production, he said.

The CMA President, Mr B.L. Jain, said that the industry expected a 6 per cent growth during the current fiscal, despite a slowdown in infrastructure growth. He said the housing sector accounts for as much as 60 per cent of cement demand in the country and that the initiatives on providing pucca houses and better quality of infrastructure facilities and public services would raise the per capita cement consumption.

Last year, the industry recorded a 6 per cent growth against 9 per cent in the previous two years.

High input costs: The construction of concrete roads and speeding up of the on-going road projects would further boost the cement demand, Mr Jain said. On the increasing input costs, he said the prices of coal alone rose by 17.5 per cent during 2003-04 resulting in a hike of production cost nearly by Rs 4 per bag.

The CMA Secretary-General, Mr E.N. Murthy, said the cement industry has the potential to clock even a higher growth rate than the 6 per cent expected rate for the current year as it is utilising only 80 per cent of its total 150 million tonnes of installed capacity. If the GDP grows at 8 per cent per annum, then cement industry has the potential to clock even 10 per cent, he said.

New CMA chief: Also, at the session, Mr N. Srinivasan, Managing Director of India Cements, has been elected as the President of Cement Manufacturers' Association for 2004-05 while Mr Manoj Gaur, Managing Director of Jaypee Associates, has been elected as the Vice-President.