Construction activities are gathering momentum after the rains and cement
prices are hitting new highs. But Sumit Banerjee, Managing Director of
India’s largest cement maker ACC says companies need to hike prices further
to protect their margins as cost pressures are beginning to hurt.

But will cement imports ease the price situation? ACC feels that is unlikely
as the entire Asia Pacific region is reeling due to tight supply situation
and poor infrastructure is making imports uneconomical.

Cement prices in Pakistan have risen by Rs 20 per bag in the last couple of
months. Egypt recently imposed export duty on cement while China has
withdrawn incentives on cement exports.

India reportedly plans to import around 1Mt of cement from Pakistan, which
is less than one per cent of India’s domestic demand. "Imports won’t make
any dent," Sumit Banerjee said. That is exactly why ACC is now stepping up
cement capacity for which it is investing around Rs 2,500 crore. "We will
add 7Mta by 2009," Sumit Banerjee said. It is not just ACC, major producers
such as the Aditya Birla group, India Cements are also scaling up capacity
big time.

Industry insiders feel that demand from infrastructure sector has just
started to grow and that will ensure there is no pressure on prices, at
least till 2010.