The industry is witnessing rapid consolidation with small companies either selling out or merging with larger competitors.
Production Statistics
|
(Mn tonnes) |
Apr-Dec 01 |
Apr-Dec 00 |
Change |
|
Production |
74.4 |
69.5 |
7.0% |
|
Consumption |
71.4 |
67.1 |
6.4% |
Source: Cement Manufacturers Association
Key Inputs
Limestone, Coal, Power, Clay, Silica
Tax Structure
|
Custom Duty
(Basic) |
|
Product |
2000-01 |
2001-02 |
|
Cement |
35% |
25% |
|
Non-coking
Coal |
25% |
25% |
Duty Structure
|
Excise Duty
Rs/Tonne |
|
Product |
2000-01 |
2001-02 |
|
Cement – Large
Plants |
350 |
350 |
|
Cement – Mini
plants |
200 |
200 |
|
White
Cement** |
24% |
32%** |
** Excise duty on white cement of 32% is on
MRP with an abatement of 40%
Major announcements made in previous year's budget
- Customs duty on cement and clinker reduced from 35% to 25%.
- White cement and other special cements will attract SED of 16% and a total duty of 32% as compared to 24% (16% basic + 8% SED)
Industry's demands from Union Budget 2002-03
The Cement Manufacturers Association has raised the following demands:
- Existing specific rate of excise duty levied on cement should continue.
- Basic customs duty on cement should be increased from 25% to 35%.
- Increase in royalty on limestone from Rs 32 per tonne to Rs 40 per tonne, made during Oct-Dec 00, should be rolled back.
- For promoting the construction of concrete roads, either 50% of the excise duty paid on cement to road building agencies should be remitted to road building agencies or excise duty should be deferred for a period of 5-10 years
- Concrete roads should be made compulsory for more than 2 lanes on the National Highway
- Urban infrastructure should be accorded industry status
- Negotiations should commence with the Governments of Sri Lanka and Bangladesh for zero tariff on cement/clinker imports from India.
- 50% railway freight concession should be granted on exports of cement/clinker.
CII has asked that abatement on Maximum Retail Price (MRP) for white cement should be increased from 40% to 60%. This is however, subject to the need for it being proven by data on post manufacturing expenses, sales costs etc.
Key Players
ACC, Gujarat Ambuja Cement, Larsen & Toubro, Grasim, India Cement, Madras Cement, JK Corp, Jaiprakash Industries, Lafarge, Mehta Group
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The Rediff-Dun & Bradstreet Budget Analysis
Run-Up To The Budget
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