"We are not planning any new projects at least for the next two years. Whatever projects we have announced, we will be consolidating those capacities," says H M Bangur, chairman and managing director of Shree Cement and president of the Cement Manufacturers' Association.
According to analysts, the industry, which was planning to add 80 million tonne capacity in the next two years, has realised that profitable cycle, which started in the second quarter of FY06, is now on the down side.
"They will wait for the next cycle, which probably may begin in 2012-13," said a city-based analyst, who did not wish to be named.
Prashant Seth, general manager (finance) of Kanpur-based JK Cement, said, "We do not want to announce any new projects in a situation when cash flow has been impacted with rising interest rates. Though we had plans, we now decided to change and go in a phased manner."
The company's chief financial officer, A K Saraugi, had told Business Standard a year back that the company would take its capacity to 15 million tonne with an investment of Rs 2,500 crore. Presently, JK Cement has a 4 million-tonne unit in Karnataka and an overseas unit in UAE.
Paul Hugentobler, member of the executive committee, Holcim, last week, had said, "Prices are not justifying our investments." The Swiss cement major, having its presence in India through ACC and Ambuja Cements, is taking its overall capacity to 55 million tonne from the present 41 million tonne by 2010.
The 6-million tonne Binani Cement, which is eyeing to become an over Rs 4,000-crore company by 2012, is taking its capacity to 13 million tonne. "There are no immediate plans for capacity expansion. The current projects are going on track. We will concentrate more on our overseas businesses in Indonesia, Mauritius and China," the company said.
However, sources in one of the leading multi-national cement companies having its operations in India, said that cement sector is an industry of cycles. "In the long term perspective, it has good future. So, we cannot stop planning merely because if the short term scenario looks tough."
