The Hindu Business Line : Cement shortage in AP may ease

Hyderabad, Aug 26 Andhra Pradesh, which has been facing shortage of cement for quite some time, is set for some relief as over six million tonnes of additional capacity is expected to be added in the next six months, according to industry experts.

“The first phase of capacity expansion projects being executed by various companies in the State is expected to be completed by March 2009. While this will bring some immediate relief, the installed cement capacity of the State will be more than doubled in the next four years,” Mr Srikant Reddy, Executive Director, Sagar Cements, told Business Line.

This would mean an addition of 35 million tonnes (mt) to the existing capacity of over 33 mt.

The benefits of the expansion projects, however, will be seen from March 2009 as over five million tonnes of new capacity would be brought in by companies such as Sagar Cements, Deccan Cements, Ckoramaandel Cements and Ultratech, among others.

“However, we cannot expect all this to cater to the Andhra Pradesh market as a good portion of it might be used for non-AP markets,” Mr Ramesh Chandro, Managing Director, Ckoramaandel Cements, said.

At the most, 1-2 mt of additional capacity might be created, he said.

DEMAND SURGE

On the demand side, the State is now defying seasonal fluctuations. Though there could be little slackening of demand due to monsoon, on the whole, they may not dip much in the demand, according to Mr Reddy.

“The monthly cement consumption in the State over the last one year shows the upward trend in demand which is expected to further go up due to impending elections,” Mr Chandro said.

There should be no surprise if the cement consumption exceeds 24 lakh tonnes by March 2009, he added.

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