The cement industry in Andhra Pradesh is reeling under the pressure of political uncertainty as Government demand for cement has come down drastically over the last one year.

The Government demand, at about four to five lakh tonnes a month, earlier was nearly 25 per cent of the total demand in the State.

“But now, due to total halt of Government housing schemes and irrigation projects, a part of the demand has vanished. It is only private demand that is driving the industry now,” a top functionary of a leading cement firm told Business Line .

According to industry figures, cement despatches in AP were in the range of 15-16 lakh tonnes. In March last year, it was at 22 lakh tonnes.

As the State is a leading market for cement among the southern states, the dip in this market has made demand in entire south ‘flat' say experts.

It may be noted here that even during the peak of agitation for a separate Telangana State in late 2009 and early 2010, cement despatches in AP remained over 21 lakh tonnes for most months.

“Government projects are not gearing up the way they are supposed to. The prevailing political scenario is adding up to other factors in subduing the cement,” Mr S V S Shetty, Chief Executive Officer, Anjani Portland Cement Ltd said.

The seasonal impact, migration of workers resulting in shortage and hesitation among builders to ground mega residential/commercial projects are some of the other factors, he added.

The industry is largely convinced that market conditions would remain without much improvement at least for next two years.

“There could be some positive development before the elections in 2014,” said a senior functionary of Ultratech Cement.

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