Cement companies to raise capacity by 2 cr tonnes
The cement industry may continue to see testing times for the better half of the year with fresh capacity of 2 crore tonnes going on stream taking industry capacity to 370 mt.
Among additions, UltraTech Cement is expected to add 8-10 mt while Shree Cement and JK Lakshmi Cement will put up 6 mt and 4 mt over the next fiscal.
Though cement demand is expected to recover, profitability may remain stressed with rising input costs.
The profitability of cement companies deteriorated since sales in the quarter rose 6% year-on-year while prices dipped by 7%. Infrastructure project execution has been declining continuously and projects are being shelved at an alarming rate. It is reported that cement demand may pick up in the second half of 2014 but that again may depend on timely monsoons.
Meanwhile, an expert appraisal committee under the Ministry of Environment has given its nod to India Cements to double its capacity and set up a 40 MW power plant at one of its facilities in Tamil Nadu’s Ariyalur district.