Cement companies fleecing Kerala customers by over Rs 1,000 Cr a year

Kochi: The profits amassed by private cement companies from other states by unreasonable hike inprices, will exceed Rs 1,000 crore a year. The annual consumption of cement in Kerala for the last few years is about one crore tons.

This is equal to about 20 crore bags of cement. At current levels, this translates into consumers in Kerala being made to pay 60 to 100 rupees per bag above the price in Tamil Nadu and Karnataka. Taking even an average of Rs 70 per bag, the extra profit amassed by the private companies will amount to a whopping 1,400 Cr rupees every year.

It was when these figures convinced him, that minister EP Jayarajan called a meeting of cement manufacturers and asked them to bring down the prices. Now in the background of a huge demand projected for the state's post-flood reconstruction effort, the minister has again called a meeting of cement companies.

Cement production is an industry fetching a very high profit margin. It is because of that cement companies are able to supply it to Tamil Nadu government at nearly half the current market price. And that cement, resold by the government under the brand name 'Amma', is a big relief to the poor there. Even in Kerala, corporate contractors who buy cement for projects like metro are also able to procure cement at similarly low price through bargaining. When such options are open, it is not understandable why Kerala government is not thinking along those lines, says Sirajuddeen Illathodi, State President of Cement Dealers' Welfare Association.

If cement prices are brought under control, the estimate cost of constructions will alsocome down considerably, which in turn will benefit the government with crores of rupees of additional revenue.