It has been a weak quarter for cement in both Telangana and Andhra Pradesh. With no big-ticket projects taking concrete shape, both prices and demand have goneup.

With the festival season in, a proposal to increase the price of the 50-kg bag by around ₹40-50 has led to a sudden scarcity in the markets. Dealers, spoken to by BusinessLine, said that there have been very little despatches since Wednesday.

The sale of cement in general has come down in the last three months. There is also some volatility in the production and dispatches. Consequently, the prices have headed south to hover around ₹250-280 depending on the regional markets.

Impact on firms With neither the real estate nor the big infrastructure projects picking up in Hyderabad or the cities in AP, especially capital related activity, companies have been making changes in their supply side.

For example, in the case of Sagar Cements, the production came down by 15 per cent in September 2015 compared to the same month last month while sales had declined by 13 per cent.

According to a senior executive of Ultratech Cements, the demand was down in the southern states in general and Andhra Pradesh and Telangana, in particular. “There has been low housing demand and the weak monsoon has impacted demand adversely. The development in Andhra Pradesh and Telangana is yet to pick up,’’ he said.

Prices improve Under these circumstances, cements prices in general had improved in the second quarter of the current financial year over the first quarter sequentially but there was no growth year-on-year, he added.

Industry sources say there is optimism of growth on two counts: the festival season will spur building activity and secondly, in AP, the momentum for construction should gain post the foundation laying ceremony.

Review meeting Telangana Industry Minister Jupally Krishna Rao,and IT Minister KT Rama Rao recently held a meeting with cement companies to discuss the issue of supply of cement and right pricing for white topping of roads and other civil works in the State. They wanted the companies to come up with a lower quote for supply. It is planned to lay about 400-500 km road in Hyderabad in two months time.

Representatives from India Cements, Rain Cements, JayPee Cements, Deccan, Penna, Keerthi Industries, Zuari Cements, Anjani Portland Cement, Kakatiya, Kesoram etc., attended the meeting. The industry quoted ₹250 per bag, but the government wanted the price lowered.

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