CREDAI Press Meet, Hyderabad

Builders Associations oppose Cement Manufactures move to hike price by 50%

CREDAI, APREDA, TREDA, BAI, Telangana Builders Federation comes together to form Joint Action Committee

(JAC) for immediate action JAC to stop purchase of cement from 5th July 2014 if price hike is not rolled back Hyderabad 2nd July 2014, The Confederation of Real Estate Developers' Associations of India (CREDAI) along with all its chapters in Telangana and Andhra Pradesh in association with Andhra Pradesh Real Estate Developers’ Association (APREDA), Telangana Real Estate Developers' Association (TREDA), Builders Association of India (BAI) & Telangana Builders Federation came together to form a Joint Action Committee (JAC) to oppose the unjustified and steep hike in the cement prices by the cement manufacturers. The JAC which is represented by more than 2000 strong Developers community unanimously decided to stop the procurement of Cement from 5th July 2014, if the cement manufacturers fail to roll back the unjustified increase in cement prices immediately.

Andhra Pradesh & Telangana contribute 80mn tonnes to the total capacity of 325 million tonnes nationally which is about 25% of the total installed capacity of the country. The present situation and political scenario and the upcoming monsoon season does not warrant the need for such hike in cement prices and requires a focus on capacity utilization. The present crisis will worsen if the real estate sector players in the region decide to stall procurement of cement. Governments in the 2 states should take strict action against the cement manufacturers for cartelization to increase the prices.

Speaking at the occasion Mr. C Shekar Reddy, National President CREDAI & chairman of JAC said "The Housing sector accounts for 64 per cent of the total cement demand in India. We cannot be cornered by the cartel of cement manufacturers with a steep hike of approximately Rs. 100/ bag (50 Kg) without any changes in the input cost, demand or government taxes. We vehemently oppose this unilateral move by the cement manufacturers and all the members of CREDAI AP and Telangana, APREDA, TREDA, BAI and TBF will take strong steps and oppose the action. We urge the cement manufacturers to roll back the hike in price immediately".

Adding to this Mr. S Ram Reddy, Gen Sec CREDAI Hyderabad said that "The move by the cement manufacturers to increase the price of cement in AP and Telangana by 50% is unjustified as there is no change in taxes or any significant increase in the cost of inputs for cement. Moreover the states of Andhra Pradesh and Telangana are rich in Limestone and mica deposits providing the cement manufacturers a strategic advantage and cost benefit. So far both the states had an advantage over the other states in India in terms of cost. But the cement manufacturers have made the price of cement across states uniform making hike steepest in our region. We demand an immediate roll back of prices for cement in both the states and urge the Governments to intervene and resolve the issue."

Mr. Jaiveer Reddy, President CREDAI Hyderabad explained further that "The focus of the developers in the region is on affordable housing. The steep increase in the price of cement in Hyderabad will add to the cost of housing and thereby increasing the burden on all stakeholders. Considering the current low prices for property this increased cost will create negative growth and escalate artificial pricing. To avoid such a situation we are insisting on an immediate roll back of the price hike."

Adding to this Mr. G Ram Reddy Coordinator and co-convener JAC said, "The Governments in Telangana & Andhra Pradesh should also take cognizance of the fact that if the real estate sector will stop procurement it will create huge revenue and tax losses to the government. There is need for an open dialogue with right intervention by the governments of two states to bring decorum and discipline in the operations of cement manufacturers. “

Mr. P Dasarath Reddy, President- APREDA/TREDA and co-convener JAC added "The developers and builders in Andhra Pradesh & Telangana operate on very low margins and have been facing lot of problems due to political uncertainty and low economic growth over the last few years. The hike in cement prices will have an impact of about Rs. 100 per sft which will have a negative multiplier effect on the economy. All the real estate players strongly oppose this decision and urge the governments at the centre and the states to take immediate steps for intervention."

Mr. C Prabhakar Rao, President-TBF & co-convener JAC added that "We have a task to build and develop the new state of Telangana; such unprecedented hike in cost of cements will hamper the process and add to the costs"

Adding to this Mr. S. N. Reddy, (BAI) and co-convener JAC said "The move by the cement manufacturers in AP and Telangana is most unfortunate as they get the benefits of the government policies but are using the need for rapid infrastructure development for their veste interests by increasing the price for cement."

The Joint action Committee representing almost 2000 developers from Telangana and Andhra Pradesh reiterated that it is determined to take the cement price hike head on and will take all appropriate measures to ensure that the cartelization is broken. JAC has vowed to bring an end to monopolistic practices initiated by the cement manufacturers association.