Displaying items by tag: Amma Cement Scheme

India: The state government of Tamil Nadu has scaled down its support for the Amma Cement Supply Scheme. Sales data shows that the scheme failed to meet its targets in 2015 – 2016 and 2016 – 2017, according to the Hindu newspaper. Its highest level of sales was 52% of procurement in August 2016. The subsidised cement scheme was launched by former Chief Minister Jayalalithaa in 2014 to help lower and middle income groups purchase cement at subsidised prices.

India: The government of the Puducherry union territory has proposed a subsidised cement scheme for low and middle-income residents. The scheme will be named after former Congress President Sonia Gandhi, according to the Press Trust of India. The project intends to emulate the Amma Cement scheme currently running in Tamil Nadu. Cement for the scheme will be procured outside of the region due to a lack of production plants.

India: The Tamil Nadu state government has sold 27,057t of Amma cement in the first nine months of 2015.

After cement prices started soaring on the open market, the state government decided to offer a bag of cement at a reduced price of US$2.93. Around 20,000t/month of cement is procured in bulk from major manufacturers for this purpose. Deserving beneficiaries can buy 250 bags of Amma cement for a 500ft2 house, 500 bags for 501 – 1000ft2 structure and 750 bags for structures of 1001 – 1500ft2. Some 10 - 100 cements bags can be obtained to carry out repair works. Beneficiaries for government schemes like 'Green House' and 'Indira Memorial Housing' are also provided with Amma Cement.

Tamil Nadu's subsidised cement scheme attracted negative attention this week when a prominent Indian politician called for it to be investigated. PMK party founder S Ramadoss alleged in a statement covered by Indian press that cement from the scheme is either being not being procured at the levels the state government are declaring or it is being sold on the black market.

Without investigating Ramadoss' comments too deeply in this article the Amma scheme does deserve looking at along with the pressures that have created it in the Indian cement market. The scheme takes its name from the nickname, Amma or mother, of the current Chief Minister of Tamil Nadu J Jayalalithaa. It follows previous populist subsidy schemes such as Amma Vegetables, Amma Water and Amma Theatres. As such it is exactly the kind of initiative you might expect a rival politician might criticise.

The scheme was created in mid-2014 to cope with fluctuating cement prices in the state. At that time Tamil Nadu consumed 1.7 – 1.8Mt/month of cement and around 400,000 – 450,000t was supplied by Andhra Pradesh. Subsequently prices rose in the neighbouring state, the purchases from Andhra Pradesh fell to 150,000 – 300,000t/month and the price went up in Tamil Nadu. The Amma Cement Scheme was created in response. It was intended to purchase 200,000t/month from private manufacturers. This would then be sold in eligibility bands with limits on the number of cement bags that could be bought dependent on size and type of project.

When the scheme launched in January 2015 the Times of India saw it as a politically canny move that would benefit middle-income rural citizens who could afford to build their own homes. Urban residents are less likely to build their own homes and so they wouldn't use the scheme as much. For example, at the start of the scheme sales in one rural district massively overtook sales in the city of Chennai.

Looking nationally, in July 2015 the Cement Manufacturers' Association (CMA) cried out that 100Mt/yr of India's production capacity was not being used due to supply and demand mismatching. It placed the value of this 'dead investment' at US$8.66bn. At present, the CMA places installed capacity at 380Mt/yr and utilisation at 275Mt/yr (70%). Previously utilisation was 94% in 2007 – 2008. Locally, Global Cement Magazine placed cement production capacity in Tamil Nadu at 33.9Mt/yr at the start of 2015. Demand was recorded at 20Mt in 2014, giving the state a capacity utilisation of 60%.

Cement demand was reported down in the southern states of India in 2014. Producers subsequently cut production to hold prices and stem their losses. With the CMA hoping for national infrastructure and housing projects to whip up demand generally, it seems possible that producers have little incentive to provide cement for the Amma scheme. One economist the Times of India quoted wondered whether the private producers would continue to sell cement to the state government at the necessary volumes. Sure enough, one of Ramadoss' criticisms of the scheme is that it may not be procuring the targeted volumes. If this is the case then the state government will have to pay more for their cement to hit the volumes they want.

India: PMK founder S Ramadoss has rebuked the Tamil Nadu government over its recent statement that Tamil Nadu Cements Corporation has sold 10m bags of Amma cement, benefiting 133,000 families, according to the Times of India.

Amma cement has been sold through 470 warehouses or godowns in Tamil Nadu from 10 January 2015. "Jayalalithaa Jayaram (chief minister of Tamil Nadu) announced that 200,000/month of cement is being procured from private cement manufacturers and sold through government godowns for US$2.99/bag. As per this announcement, the government should have procured 1.25Mt or 25m bags of cement. Since the prices of Amma cement are low, they should have sold like hot cakes," said Ramadoss. He added that the government statement means that only 40% of the procured cement has been sold so far.

Ramadoss alleged that those who approach the government cement godowns to purchase Amma cement are often driven away. "Tokens are issued for those who want to purchase Amma cement and about 100,000 people who got tokens are awaiting supply. If the Tamil Nadu government actually procured 200,000t/month then all those who applied for cement should have been served," said Ramadoss. He said that the only reason for this not to have happened was either that the amount of cement claimed by the government was not procured, or the procured cement was sold to the black market.

Ramadoss has demanded that the government of Tamil Nadu publish a white paper on the total amount of cement procured, the amount of cement sold and measures taken to ensure seamless supply of cement.

India: The Tamil Nadu government has rolled out 'Amma Cement,' a scheme that will see it sell cement at a subsidised rate. According to the scheme, the government will procure 200,000t of cement from the private sector and sell it at US$3/bag in all corporation, Municipalities and other local body limits.

The initiative was launched in Tiruchirappalli on 5 January 2015 and will be expanded in phases and implemented throughout Tamil Nadu by 10 January 2015. Beneficiaries can avail a minimum of 50 bags of cement for 100ft² and a maximum of 750 bags for 1500ft² at US$3/bag. They have to submit the approved building plan with the local authorities to use the scheme. Further, 10 - 100 bags will be provided for house repair work. The scheme will also be available to those constructing houses under the government's solar-powered green houses scheme.

India: The Tamil Nadu government has announced the 'Amma Cement Scheme,' under which it will procure cement from private manufacturers with the intention of re-selling at a set price in the event of a possible future price increase.

J Jayalalithaa, Tamil Nadu's chief minister, said that she had recently discussed the situation regarding production of cement from the state and supply from outside with officials. Tamil Nadu consumes 1.7 – 1.8Mt/month of cement. Some 400,000 – 450,000t is supplied by Andhra Pradesh, where prices have recently risen substantially. As such, Tamil Nadu has reduced its purchases from Andhra Pradesh to 150,000 – 300,000t/month. However, Tamil Nadu's cement producers have risen their own prices as demand grows.

The Amma Cement Scheme was created in response. The Tamil Nadu government will purchase 200,000t/month of cement from private manufacturers and re-sell it through local distributors. Beneficiaries are eligible for a maximum of 750 bags and the cement could be bought by submitting a government-approved building plan or aroad plan. Those who want to buy cement for repair and renovation are eligible for 10 - 100 bags. Tamil Nadu Cement Corporation will be the nodal agency and the scheme will be implemented by Tamil Nadu Civil Supplies Corporation and Rural Development Department.