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Cement industry puts hope on infrastructure growth

10 Jul 2014

July 10: Indian cement industry expects that government’s push on infrastructure projects would lead to higher demand for their material in coming days and there would not be much impact on their cost of production due to possible increase in coal cost following increase in customs duty and clean energy cess.

“Infrastructure spending will lead to spurt in cement demand and the impact of rise in cost of production will be mitigated by rise in demand,” an official of a cement company said.

The official said that fuel cost comprises 17% of overall cost of production of cement and the increase in import duty on coal by 0.5% and clean energy cess by Rs 50 per ton will not have negative impact on the industry.

“We were, however, expecting that the government will waive the duty on imported coal as only on July 7 power minister Piyush Goyal, who is also power minister, had urged the power plants to go for higher import of coal,” the official added.

Most of the cement companies in India had reported a fall in their net profit on decline in gross sales and a soft price trend on weak demand in 2013-14.