Capacity utilisation across the cement plants in Andhra Pradesh has dropped below 50 per cent after the state government imposed a three-day power holiday on industries this week.
Prior to the power crisis, companies such as Orient Cement that send a substantial portion of output to neighbouring states and also to western region were running at 70 per cent capacity utilisation while the plants that mostly cater to the Andhra market were running anywhere between 40 per cent and 70 per cent, according to industry estimates.
Though the impact of strike on cement consump-tion in the state was not very significant in September, despatches had come down due to a decline in production, an industry representative said here today. The combined installed capacity of cement plants in the state is close to 4 million tonnes.
Real estate development, apart from government wo-rks in Panchayat Raj, Roads and Buildings including the construction of new sch-ool buildings, is keeping the consumption close to last year’s level at this point in time, industry sources said. The real estate sector in coastal Andhra has considerably picked up momentum this year fuelling the overall demand.
However, industry estimates suggest consumpt-ion was marginally down during August and September as compared with last year though July recorded a marginally higher consumption at 1.85 million tonnes compared with 1.83 million tonnes in the corresponding month last year.
August and Septem-ber saw cement consumpt-ion at 1.53 million and 1.48 million tonnes respectively as against 1.6 million and 1.64 million in the same period last year. Normally, these two months register the lowest consumption in a year due to monsoons.
With decline in despatches and lower consumption levels, companies are expected to take a 20-30 per cent hit in sales and profits in the second quarter as compared with the first quarter this year, according to a cement company official.
