Hike in cement prices has put the southern construction industry in jeopardy
There was a recent hike in cement prices and the real estate developer community is extremely upset about it as the cost of the projects will go up many folds as a result of this. The southern states are planning to play a demand and supply game to bring down the prices as they feel that if they stall the construction work for some time then the stocks would pile up and the cement prices will come down.
An industry representative who has inside information about the entire process mentioned that a decision on this will be taken after discussions with multiple stakeholders in the construction segment takes place. The industry is not in a position to absorb hike as it will badly affect its profit margins or pass it to the customers as then the customers will lose faith in them.
Due to the turbulence in the political scene in Andhra Pradesh and Telangana, the prices of the cement bags have gone up tremendously. They are now sold at Rs 280 to Rs 285 compared to Rs 215 to Rs 225 a bag a few days ago.
C Shekar Reddy, the national president of Confederation of Real Estate Developers‘ Associations of India (CREDAI) mentioned that the developers are asking the cement industry to reconsider their decision on the pricing. Stopping the construction work for a few days may reduce the price of the cement bags; however the construction labourers will be affected as they will lose out on their daily wages.
Source- Financial Chronicle
Andhra Pradesh, Cement gets dearer, Cement price hike has construction industry worried, Cement price hikes unlikely to improve industry margins, Cement prices rise in Telangana, prices rise by Rs 10-25 per 50 kg
