The Indian cement industry, which has been beset by cyclical demand, structural overcapacity and a nearly Rs. 7,000-crore fine by the Competition Comission, is hoping to see a slow revival in 2013, according to N Srinivasan, Managing Director of India Cements.
In an interview with The Hindu, Mr Srinivasan pointed to three major reasons for the “pall of gloom” surrounding the industry and general business sentiment. The first one was the global slowdown caused by the financial crisis. There was also a drop in investment in infrastructure and housing coupled by a high interest rate regime. The return of inflation and an across-the-board increase in prices of power, freight and the like too had contributed to the `gloom’ situation.
“Growth in the South, which has been our strong point, has pulled down. But we are now hoping for a revival as we are seeing signs of slow growth. However, much of this depends on how the economy bounces back, and whether investment goes into housing and infrastructure,” he said.
Warning that the revival would still depend on various factors, including the types of stimulus present in the coming budget, Mr. Srinivasan also pointed to the fact that this was an election year. “We must see how things pan out. This is an election year after all. A cautious approach to expansion is certainly called for. I prefer to take a long-term view on things. A five-to-ten year outlook shows that business is still good,’’ he said
