Chennai: Shocked over the steep increase in the price of cement, the Confederation of Real Estate Developers' Associations of India (Credai) Chennai, has urged that the state government to take action to roll it back.
Credai, Chennai, president W.S. Habib told mediapersons here that the real estate sector was facing a crisis and sought steps to cut down the price of cement which had increased from Rs 250 to Rs 400. Association representatives are likely to meet Chief Minister Edappadi K. Palaniswami to highlight their demand shortly.
Mr Habib said cement manufacturers had increased the price without notice on February 1. Housing projects, including government projects, worth Rs 10,000 crore, were in trouble. More than 30,000 housing projects of builders, including small and medium companies, were affected and a large number of workers affected.
He said 40 companies in south India including 15 in Tamil Nadu had formed a group and increased the price even though the cost of raw material remained unchanged. Besides, the manufacturers had cut down production to 40 per cent of their capacity to create artificial demand.
He said that for the past few years the construction industry had witnessed a rise in the cost of materials which was continuing.
"The housing and real estate sector is the biggest demand driver of cement, accounting for about 65 per cent of the total consumption. The other major consumers of cement include public infrastructure at 20 per cent and industrial development at 15 per cent," Mr Habib said.
"The price of a bag of cement in Tamil Nadu has increased 36-44 per cent recently, from '250 to '340-360. The rise is almost '90 to '110 increased in Tamil Nadu. In Karnataka, it's about '320, while in Andhra Pradesh it is being sold at over '295." he said.
Credai has informed the Real Estate Regulation Authority about the price rise. If the cement manufacturers do not cut down the cost, the association is likely to stage a massive demonstration in the state, he said.
