Builders plan own factories to tackle cement pricing

In an attempt to tackle the constant price rise and fluctuations in cement prices, the Builders Association of India (BAI) has decided to stand together and set up its own plants to produce the key building material – cement.
 
The BAI has recently decided to set up about four captive cement plants to meet the demand of its more than 11,500 members, besides those of the builder fraternity and the National Highway Builder Federation.
 
According to BAI it has become difficult to quote fixed rate government contracts for roads, bridges and highways with high fluctuation in cement prices. Today, cement costs around Rs. 300 per bag, while last March it was priced between Rs. 150 and Rs. 170 a bag. The association expects that with the development of the proposed plants, cement will be available at Rs. 150 per bag.
 
The BAI plans to set up at least four plants having an annual production capacity of five million tonnes per annum. The association proposes to invest Rs. 2,250 crore per plant in which the equity component of 25 per cent could come from members ranging from Rs. 10 lakh each to Rs. 5 crore.
 
The association had zeroed in on limestone rich areas in Andhra Pradesh, Karnataka and Gujarat and Chhattisgarh. In Andhra Pradesh, the plant could be put up in Nalgonda or Cuddapah districts where limestone is available in plenty. The plant could serve Chennai, Hyderabad, Bangalore and parts of Maharashtra. Similarly, in the western region it could be in Gujarat or Rajasthan, and Chhattisgarh could cater to Madhya Pradesh and the eastern states.

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