With the Tamil Nadu Government threatening to crack the whip, cement companies in the state have offered to supply cement at subsidised rates, but only to the poor and against permits.

The response from seven private cement manufacturers to sell cement at Rs 200 a bag of 50 kg upto a maximum of 400 bags to the poor has followed the Government’s decision to allow the State-owned Tamil Nadu Cements ( TANCEM) to buy one lakh tonnes from Minerals and Metals Trading Corporation and authorise further imports if the private firms do not bring down the prices. The Government also warned of takeover if the cement companies do not fall in line.

In the light of this, a delegation of seven manufacturers, including India Cements chairman N Sirnivasan, Madras Cements’ Ramasubrahmaneya Rajha and Chettinad Cements’ M A M R Muthiah  met Chief Minister M Karunanidhi on Wednesday and made this conditional offer, according to an official release.

The manufacturers have offered to reduce the price of cement they are supplying to TANCEM by Rs 10 a bag and bring it down to Rs 220 a bag and supply 14 lakh bags a month.

As for the poor, the companies have said they should buy a minimum of 50 bags and make payments in advance.

20 lakh cement bags

They have offered to supply 20 lakh bags of blended cement every month in all districts with each company choosing a district nearest to it for distribution with permits to be issued by the authorities.

The permits should be issued by district authorities to ensure that cement at concessional prices reach the intended beneficiaries, they said.

L Moorthi, former chairperson of Builders Association of India, said: “Since the Government is going to import one lakh tones of cement soon, the private players will have to bring down their prices”. He has also recalled that cement manufacturers have failed to keep the promise they made to Union Finance Minister P Chidambaram in March last year that they would not raise the price beyond Rs 230 a bag.

Still a profit?

R Desikan, a consumer activist, has said the production cost being Rs 120 a bag, companies can sell at the rate of Rs 130 to Rs 140 a bag and still profit.
The government has not reacted yet to the cartel’s offer.