Producing cement in southern India at the current price of around INR370 (US$5.83)/50kg is not viable, according to N Srinivasan, India Cements' vice-chairman and MD.
Against a background of falling demand, interest, freight and other manufacturing costs were steadily increasing, pushing cement producers into losses.
“Cement is treated as a commodity, but it is actually a manufactured product but doesn’t get the benefits of a manufactured product,” he said. “Over the last eight years, raw material costs and other overheads have gone up, but the prices have not gone up commensurately. For instance, a bag cost INR250 in 2007, but the amount has increased only to INR375 a bag over the last eight years."
