Housing sops to aid cement industry

ENS ECONOMIC BUREAU

MUMBAI, FEB 27: Cement producers, hit hard by the recent freight hike, are optimistic that the new housing and infrastructure initiatives unveiled by Yashwant Sinha's union budget for 1999-2000 may revive the fortunes of the industry. The cement industry has heaved a sigh a relief as the budget has proposed removal of the 5 per cent restriction on modvat credit, as it may give a boost to cement split-location units. "The renewed thrust on housing and road development will help the cement industry in a major way," said Gujarat Ambuja Cements treasurer Anil Singhvi.

The decision to amend foreclosure laws, says Singhvi, may accelerate the mega housing plans of the government, which in turn will benefit cement companies.

However, the marginal hike in effective import duty for coal from 19.6 per cent to 21.16 per cent will adversely affect the industry bigwigs - Larsen & Toubro, ACC and Gujarat Ambuja Cements - which import bulk of their coal requirements. Besides, the 10 per cent surcharge will not findfavour with the industry, which is going through the longest ever spell of recession."The budget proposal to hike import duty of coal and imposition of surcharge will adversely affect cement companies, who are also faced with a harsh freight structure," said ACC director AK Chatterjee.

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