Chennai, May 27 (FN Agency ) India Cements Limited on Friday announced that it will hike the prices by Rs 55 per bag in three phases from June one and will also monetise some of its land to settle its debt and for capex. Talking to reporters after the company’s Board meeting, India Cements Vice-Chairman and Managing Director N.Srinivasan said the prices will be increased by Rs 55 per bag to recover production costs which went up due to drastic increase in coal prices. The prices would be hiked by Rs.20 on June 1, Rs.15 on June 15 and Rs.20 on July 1, he added. Srinivasan said as on March 31 FY 22, the company had an outstanding debt of Rs 3000 crore of which Rs 500 crore would be paid this year. “We are planning to repay Rs 500 crore this year. This along with to the extent required for capex, we plan to monetise our surplus land”, he added.
Asserting that the company was not in distress sale mode, he said “we have about 26,000 acres of land in Andhra Pradesh and Tamil Nadu. “The lands are of different categories…we have planned to repay about Rs.500 crore debt this year and land monetisation will happen to that extent”, he said. . Observing that all of his company’s products are premium priced, Srinivasan said the consumer has a choice as cement bags are now available in the price points ranging between Rs.320-450. On other cement manufacturers planning to reduce the price per bag, he said “don’t compare. All costs have gone up. If I don’t increase the prices, I will run up huge losses”. With a slow recovery in the southern markets further affected by record rains and floods in the previous quarter, the selling price of cement was under constant pressure resulting in uncompensated increase in the cost of production.
This was further compounded by the reduction in volume as the company as a prudent policy withdrew from the far off markets to focus on home markets, he said. The spiralling prices of fuel together with the shortage in availability of the same affected the margins of the industry. The woes of the industry worsened further with the out-break of Russian war with Ukraine resulting in sanctions being imposed on Russia and its exports fuelling further shortage of coal and oil in the market. While prices of diesel have shot up by more than 20% during the year, the prices of coal be it Thermal coal or Petcoke skyrocketed and have more than doubled during the year. The recovery of the cement industry in the south was also sluggish due to above reasons and the economy is yet to pick up to its normal levels. With a huge supply overhang, the selling price of cement was volatile.