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The New Year has brought some cheer to cement consumers, as the retail price per bag has crashed by about Rs 45-50 in Andhra Pradesh.
For the cement industry in the State, the year ended on a discouraging note with not just plummeting prices, but the demand has also been steeply dipping steeply.
The drying up of Government contracts through irrigation, infrastructure and housing programmes, was a major reason cited by industry sources for cement players being hit during the year.
The price, which was hovering around Rs 280 in November, fell to Rs 260-265 by the middle of this month. It subsequently decreased and today the price is in the range of Rs 205-Rs 225, revealed our enquiries with the retailers.
In the Hyderabad market, the price is in the range of 205-225, while it is Rs 210-220 in Telangana.
They are a tad higher in the coastal districts at Rs 230-240 and Rs 250-plus in Rayalaseema. Some brands also sell below Rs 200 in the State Capital.
A senior functionary of a Hyderabad-based listed cement firm told Business Line that the serious dip in demand and significant increase in supply have been driving the price “below viable” levels. Apart from the entry of new players including KCP, Jaypee Cements, JSW Cements, Jaya Jyoti which increased supply, the lack of demand from infrastructures and State Government, pushed the industry into the gloom.
“The capacity utilisation of the industry in general is only about 60 per cent,” he added.
The industry is expecting the situation to improve from the beginning of next financial year in view of elections in the State and Centre in 2014.
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