Railway minister Suresh Prabhu raised the freight for cement. Sanjay Ladiwala, chairman, Cement Stockists & Dealers Association says companies will not be able to pass it on because at the moment prices are under pressure.
Below is the verbatim transcript of Sanjay Ladiwala's interview with CNBC-TV18's Latha Venkatesh
Latha: What is the impact, the freight for cement goes up by 2.7 percent, will this be immediately passed on you think?
A: No, it will not be possible to pass it on because at the moment prices are under pressure. So I don’t think there is too much scope for increasing the prices. So it will have to be absorbed. At a time when the industry itself is just about in the blue, it might be a burden that they may have to bear. However, as compared to the previous years, it is not too high but back of the envelope calculation shows that it is about Rs 30 a tonne. However small it might be, it is still a burden which we may have to bear and it may affect slightly their bottomline.
Latha: You are sounding relieved it is only Rs 30 per tonne. Why, in prior years you all had 10 percent at a time?
A: No, I think there were times when they were about 6 percent. So compared to that it is lower but at the same time maybe they were hoping that there won’t be any increase but that is not what is going to happen.
Latha: Rs 30 per tonne is not demand destroying, is it?
A: Not at all.
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