Currency ban may derail cement companies
After investing Rs 600 crore in expanding its annual capacity to 4 million tonne from 2 MTPA, BK Birla group company Mangalam Cement is now looking at increasing its market share in north India to 4% by the end of the current financial year from the current 3.47%.
The new capacity has come on-stream at a time when the cement is undergoing an extended period of sluggish growth but the company believes that demand is poised to see an uptick beginning next January.
“Demand from the housing sector earlier contributed 64% to the overall volumes of the cement industry. With the real estate industry coming under pressure over the past couple of years, the demand mix has changed in favour of the infrastructure sector. Government intent and subsequent gradual pick-up infrastructure growth offers hope for sustainable future for the industry. But for a meaningful demand growth, real estate industry needs to pick up pace. Unless this sector participates actively, both volumes and realisations will be muted,” said Kaushlesh Maheshwari, president (Marketing), Mangalam Cement Ltd, which sells its products under the brand name of Birla Uttam.