Cement manufacturers in Madhya Pradesh and Chhattisgarh fear a bearish trend will grip the industry in both the states as most of the government-sponsored projects are likely to be completed by June this year.
Moreover, credit offtake is also poor in housing projects and this has badly affected the cement industry.
Some of the major projects nearing completion include Delhi metro and Tehri dam. “The time ahead does not bode well for the industry. Government-sponsored infrastructure projects would be completed by June and the sector is likely to face lean season till September,” said RM Gupta, president, Cement Manufacturing Association of Madhya Pradesh.
Gupta, who is also senior executive president of Grasim Cement, an Aditya Birla Group company, said, “State government’s apathy towards industrialists, slowdown, among others have pushed the industry into a difficult zone. Deteriorating quality of limestone reserves in Katni and Satna belt and high power tariff have forced us to switch to high order management practices in order to survive.”
The company plans to expand the capacity of its Neemuch plant in Madhya Pradesh from the existing 5 million tonne to 7 million tonne from next year.
Undivided Madhya Pradesh is in neck and neck competition with Rajasthan with a total production of 30 million tonne. “Madhya Pradesh and Chhattisgarh together account for 16-17 per cent of the country’s total cement production,” said RK Patil, president of Chhattisgarh Cement Manufacturer’s Association.
As many as 10 companies had planned to invest in Madhya Pradesh, but according to Gupta only two — JP Bhilai Cement and Prism Cement — are setting up plants in the state this year. Both the projects are coming up in Satna district. While JP’s plant is coming up in association with SAIL in Babupur village, Prism Cement is investing Rs 800 crore in its project.
“The state government does not have data on limestone reserves. Besides, the power, which constitutes 40 per cent of the raw material, is a big problem for the industry as it fluctuates and has no quality,” a cement manufacturer said on condition of anonymity.