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Zuari Cement Ltd is set to augment fresh capacities in spite of the tough market conditions in the country, particularly in South India.
“The company is setting up a cement grinding unit at Auj and Shingadgaon in Solapur, a terminal in Kochi and an integrated cement plant at Gulbarga,” said Krishna Srivastava, Whole-time Director.
“The Rs 2,500-crore capacity augmentation will go on in spite of the tough market conditions now, as we believe that there is huge potential going forward.
“The new plant at Gulberga will have capacity for 3 million tonnes (MT) per annum,” he told Business Line .
Of the country’s cement capacity of 350 MT, South India accounts for 150 MT. However, the demand-supply situation is quite bad in South India, with just about 70 MT of demand.
This situation is mainly due to delays in infrastructure projects securing clearances and low spending by the Government.
COSTS SPIRAL Also troubling the cement industry is the fact that the cost of production has gone up in the past couple of quarters.
While rail freight cost is up 30 per cent, the cost of inputs has increased due to the import of coal, rupee depreciation and a hike in fuel cost.
All these are leading to pricing pressure, Srivastava said.
“Cement demand is better in the North and the East but pretty sluggish in the South. Once some of the clearances are expedited and new projects get under way, the demand will get better,” he said.
rishikumar.vundi@thehindu.co.in
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