Andhra Pradesh: Cement companies announce price hike

Vijayawada: As anticipated, the cement companies announced a price hike across the spectrum of Rs 20 to Rs 30 per bag on Wednesday, a development that will affect the construction industry further.

The middle class and the poorer sections are bound to be bitten by the same in the state. The cost of building material, including steel, has gone up significantly in recent times affecting particularly the housing schemes offered by the governments.

Rating agency Crisil has recently warned the nation that retail prices of cement are likely to rise again by another Rs 15-20 over the next few months and touch an all-time high of around Rs 400 per bag this fiscal. It stated that the rise in price could be attributed to input cost pressure such as coal and diesel.

Crisil in its report said amid rise in price the earnings before interest, tax, depreciation, and amortisation (EBITA) of cement makers will decline by Rs 100-150 per tonne this fiscal because of high input costs.

The prices of imported coal (which has seen a hike of 120 per cent on-year in the first half) and pet coke (up 80 per cent) are likely to increase power and fuel costs by Rs 350-400 per tonne, it had warned. This amounted to around a 40 per cent hike.

There is already a hue and cry from the beneficiaries allotted house sites in the state as they feel the subsidy sanctioned by the government was not sufficient to meet the steep cost hike of the building material. Wednesday's announcement would only add to the burden further.