Builders to stop buying cement to protest high prices

NAGPUR: As a mark of protest against the cement lobby, builders in the state have decided to stop cement purchases for a week. The strike beginning from Monday has been called by the Maharashtra unit of Confederation of Real Estate Developers of India (CREDAI). A similar strike was resorted to 13 years ago, when builders had started an indefinite purchase ban in 2001.
The builders' guild alleges cartelization by the cement industry, with all manufacturers coming together to increase rates by Rs 70-100 over a month. Cement bags priced between Rs 220 to Rs 240 are now being sold for Rs 300 to 330 to bulk consumers. This has increased the cost of construction by Rs 100 per square foot, said a press release issued by Nagpur unit of CREDAI.
Prashant Sarode of CREDAI-Nagpur told TOI that the hike in cement prices is unjustifiable. Rather the rates should come down during the rainy season as construction activities take a break during this time. Last year, the rates had touched a high of Rs 300 but that was before summer, which is even otherwise peak season for construction activities. Sarode said this strike is aimed at attracting the government's attention towards the issue.
Vivek Pathak of city-based M/s Abhinav Developers said this year construction activities continued after June due to the dry spell. Taking advantage of the situation cement manufacturers have increased the rates. However, the levels are certainly much more than the demand, he said.
Pathak said as cement prices have led to a considerable hike in the cost of construction, there are chances that builders may have to evoke the escalation clause. "It is rare indeed to evoke the escalation clause," he said.
Last week, Vidarbha Taxpayers Association (VTA), a city-based body taking up public issues, had written to the Competition Commission alleging a cartel by cement manufacturers. The letter also named some cement majors with units at Chandrapur, a hub for the industry.
A spokesperson for Ambuja Cements, one of the companies having a unit here, said the company has not been a part of the cement manufacturers association and hence the question of cartelization does not arise. On the prices, the reply was that the company fixes rates according to its own market analysis.
Meanwhile. Sarode said that after the seven-day strike CREDAI will chalk out further action according to instructions from the state headquarters.