The Hindu Business Line : Cement makers offer 5% discount to Govt

Responding to the "requests'' to control rising cement prices, cement manufacturers today wrote to the Government that they would maximise production and despatches that would meet the swelling demand and would help reduce prices.

However, no specific measures to bring down the price for the retail buyer were suggested.

But for Government supplies the manufacturers assured to give a 5 per cent discount on current prices.

The Minister for Commerce and Industries, Mr Kamal Nath, told reporters that "the cement manufacturers have responded to my meeting with them on May 12."

Sharing the Government's concern over the current increase in cement prices they have agreed to maximise production and despatches to increase availability and to ensure that the retailers do not indulge in profiteering," he said and added that the industry would also give 5 per cent discount to the Government.

"The Government is in touch with the cement manufacturers to prompt them to take further action to bring down prices which have in the last three days already stabilised and in fact, come down in certain centres of consumption," he said.

Earlier, in the last week's meeting Mr Nath had asked the companies to suggest specific measures by Monday that can bring down cement prices following which the Cement manufacturers association responded today. Cement prices have skyrocketed since December 2005 from Rs 135-40 per 50 kg bag to Rs 205-10 in May 2006.

According to Government's estimates, while the cost for the cement companies have increased by around 15 per cent price hikes had been in the range of 30-50 per cent.

Following such abnormal rise the Ministry first intervened in the beginning of this month on May 2 when the manufacturers were told to work out modalities for price reduction in a week's time.

Since prices did not come down Mr Kamal Nath urged the manufacturers last week to suggest ways for curbing price hikes by today.

Pointing out towards the need for new investments in cement manufacturing the Minister today was also assured by the cement manufacturers of putting up new greenfield cement plants. "The cement industry has undertaken to bring in fresh investments and create additional capacity of 30-35 million tonnes in the next 3-4 years," he said.