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TIOL-DDT 276 · Wednesday, 4 January 2006 · story 1 of 3

Mini cement plants - mega woes- Will the FM help the small players?

By Vijay Kumar

Mini cement plants don’t remain mini forever – most of them get closed. Technology over the years has ensured that with the same machinery, with a little change they can produce far more than what they were doing – with a little support from the government they can survive and contribute to the nation’s progress. Will the big ones and the government allow them?

The mini cement manufacturers association has submitted a memorandum to the Revenue Secretary requesting for enhancing the eligibility level for excise exemption from the present 99,000 tpa to 2,64,000 tpa. Will the government lose revenue by this? No! On the contrary the Government stands to gain about sixty Crores. How? With the enhanced capacity, more cement plants will be revived and there will be more production and more duty.

Many of the units are on death bed and can come back to a vigorous life with a little oxygen. That little push or its absence will either make them or mar them. Some facts:-

  • Cost of production in mini cement plants is higher than in major plants. So they were given excise duty concession

  • The mini plants provide 7 to 8 times more jobs than large plants – that too in rural areas

  • Unable to face competition from large plants nearly 300 out of the 350 mini plants are closed. What a waste of capital and machinery.

  • Even the survival of the 50 odd units is doubtful.

  • All these units can be revived with a little support

  • Whenever the Government enhanced the exemption limit there has been an increase in duty collection.

  • Planning Commission’s working Group had recommended enhancement of the exemption limit.

  • The demand for cement is to grow in the coming years and unless these mini cement units are revived, we may face a situation where we will have to import cement.

It is not only good politics but also good economics for the government to allow these mini cement plants to survive. Of course the big fish will not like it. Will the Government see reason?

Today we are carrying an article by the President of the Mini Cement Manufacturers Association. Please see our special column.