SICMA assures govt of making cement available at reasonable price point

Topics Coronavirus | Cement

South Indian Cement Manufacturers’ Association (SICMA) on Saturday said that based on the appeal made by the Ministry of Industries, it has assured the public at large that during the ongoing pandemic the association will ensure that cement is available at a reasonable price point.

The 25-member body SICMA also said it is closely working with Tamil Nadu government in making cement available at concessional price to the weaker sections of the society.

Currently, the domestic cement industry is going through challenging times amid the ongoing second COVID-19 wave, operating only at 30-40 percent capacity utilization.

The second wave of Covid-19 has adversely impacted domestic cement production - the all India production declined 35 per cent month-on-month in April 2021 and was lower by 4 per cent compared to April 2019, said ICRA in its recent report.

The cement companies have undertaken price hikes by an average of 5 per cent year-on-year in April 2021. This hike is driven by the increase in the input costs, primarily power and fuel expenses and freight expenses over the last few months.

While the cement prices are likely to largely sustain in the near term, the higher input costs, due to the increasing crude oil prices and under-absorption of overheads, are likely to result in a moderation of EBIDTA/tonne to around Rs 1,200 per tonne in Q1FY22, lower by 20 per cent year-on-year and 6-7 per cent quarter-on-quarter basis, it said.

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