The roughly eight-million-tonnes-a-year cement market in Kerala looks set for a shakeup amid allegations by dealers that producers are trying to create artificial scarcity in the market and hike price.
Cement dealers, under the aegis of Kerala State Cement Dealers’ Welfare Association, claimed here recently that producers were not selling stocks since Monday in retaliation to a boycott of two producer companies by the Kerala State Cement Dealers’ Association. However, an official of a cement company denied any knowledge of disruption in cement supplies in Kerala.The association’s Ernakulam district president Devassy Kunju said that there were nearly 2,000 dealers under its banner and that the association issued a notice to cement companies 15 days ago that they must end the credit note system.
The credit note system involves dealers paying more than what they are billed for. The dealers are billed Rs.391 per 50-kg bag. But they sell the bag for Rs.340. The difference is later paid to the dealers.
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Mr. Kunju said they sought an end to the system because small-time dealers were unable to cope with it and faced serious trouble from the sales tax authorities in the State.