FCC

Cement demand sees slow pick up in south India; India Cements? performance up

2018-10-01

Plants in the southern states of the country are reportedly witnessing higher capacity utilisation, and as a result, the region is catching pace with the rest of the country in terms of cement demand. The cement demand has a problem of over capacity, with 160 million tonne (out of a total capacity of 425 mt in India), as against a demand of around 70 to 80 mt.

The rise in requirement of cement will help improve the capacity utilisation, which was 70 per cent in 2017-18. In the last quarter of this year, cement is expected to improve, along with volume. Cement plants in other parts of the country were functioning at full capacity last year.

India Cements (ICL) performed better than other cement players in the south last year, and its capacity utilisation stood at 71 per cent. ICL?s improved its performance substantially with a capacity utilisation of 80 per cent in the first quarter of the current financial year, as compared to 67 per cent in the corresponding quarter of the previous financial year.

As reported, the second quarter was also expected to better despite the floods in Kerala and transporters? strike. The company is expected to operate at almost full capacity in Q4 FY2019, and consequently improve its performance.

The company has no plans of expansion as of now. Reports indicate that it will first look at opportunities to expand capacity after reaching the expected full capacity utilisation.