South India is slowly catching up with rest of the country in cement demand with plants in the region reporting higher capacity utilisation during the current year, according to N. Srinivasan, vice-chairman and managing director, The India Cements Ltd. (ICL).
Responding to queries at the company’s annual general meeting here on Thursday, he said, “After a long time, cement demand is slowly picking up in the south, which has the problem of over capacity with 160 million tonnes (out of total capacity of about 425 million tonnes in the country) against a demand of just about 70 to 80 million tonnes, he said.
Better capacity use
“With [the] pickup in demand, capacity utilisation in the south this year is expected to be much better compared with 70% in 2017-18. “Along with the volume, cement price is also expected to be better in the last quarter of this year,” he added.
Cement plants in other regions were already operating at almost full capacity, Mr. Srinivasan said.
Capacity utilisation of ICL stood at 71% last year, which was better than the industry peers in the south.
ICL had substantially improved its operating performance in the first quarter of this year (April- June) with a capacity utilisation of 80% compared with 67% in the same quarter of the previous year, he said.
Mr. Srinivasan expected the second quarter also to be better despite the floods in Kerala and the transporters’ strike. “This year, we are seeing good volume and going forward, we will be operating almost at full capacity in the fourth quarter (January-March) of this year resulting in better performance,” Mr. Srinivasan told the shareholders.
Referring to the Sankari and Dalavoi Plants in Tamil Nadu, he said that the company had not taken any decision on their expansion yet. It would explore avenues for augmenting capacity after attaining the expected full capacity utilisation, he added.
