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Tamil Nadu construction companies respond to price increases

World Cement,

In response to the 100% increase in the price of cement in Tamil Nadu over the last month, construction companies are taking action by arranging a strike to take place today (28th), while other companies have begun importing cement from neighbouring countries. Confederation of Real Estate Developers' Association of (CREDAI) Tamil Nadu chapter president T Chitty Babu and Builders' Association of India (BAI) previous President Radhakrishnan revealed that although construction operations would cease for the day, the employees would still receive wages. Chitty Babu pointed out how the rise in cement prices has had a knock on effect for the construction industry: "the cost of construction has gone up by about 40% in less than two months and almost 40% of works across the state have come to a halt."

Construction companies operating in the region are implementing a procedure to import cement from countries such as Pakistan, Iran, Bangladesh and Ukraine. Reports indicate that orders have been placed for around 1 million t, with the price of imported cement being on average 44% lower than local supplies. Builders based in Kerala recently purchased 20 containers from Pakistan, each one weighing 20 t. With local cement costing Rs. 260 – 300 per kg, importing this cement from Pakistan cost just Rs. 190 per bag.

N. Nandakumar, Secretary of CREDAI, expressed his concern at the dramatic increase: "we are not able to understand why the price increase suddenly in the domestic market, when the raw materials, for cement production, did not increase in the last one month, how can the end product price alone increase.” CREDAI recently met with cement producers to discuss the price hike, but apparently, the producers were not able to justify the increase.

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