We expect demand to improve in Karnataka and Kerala as they are recovering from floods and calamities

Perspective

We expect demand to improve in Karnataka and Kerala as they are recovering from floods and calamities

We expect demand to improve in Karnataka and Kerala as they are recovering from floods and calamities

01 Dec 2019
- K Swaminathan, CMO, JSW Cement

India is the second largest producer of cement in the world. The housing and real estate sector is the biggest demand driver of cement, accounting for about 65 per cent of the total consumption in India. 

However, the cement sector has been showing a declining trend in the past two quarters. 
Says K Swaminathan, CMO, JSW Cement, “While the outlook in the long term is definitely positive, we see some amount of stress in the near future. While the last quarter of the previous financial year was a stellar one for the cement industry due to it being an election year and almost all major players wanting to cash in on the demand uptick, the current year does not seem likely to reach the same levels as the last year. Infrastructure spending is also likely to be lower and the lull in urban housing seems to continue.” He shares more on the market and expectations...

Geographically, where do you see maximum demand coming from?  
We expect demand to improve in Karnataka and Kerala as these states are recovering from floods and calamities. Having said that, demand in Andhra Pradesh is likely to remain muted, with most projects being stalled. This is likely to put pressure on prices across the South Zone.

For East, the demand has shown a decline till October 2019. 
We expect some improvement in the demand towards the last quarter, although there is still uncertainty over the level of government spending and infrastructure projects compared to last year.
We expect demand to remain stable in West zone with the end of the monsoons, with volumes likely to pick up from the mega projects and other infrastructure and road works.

Tell us about your existing manufacturing units and current operating capacity.
We have a total capacity of 14 MT with six plant locations – Nandyal and Vijayanagar works in the South; Salboni, Jajpur and Shiva Cement in the East; and Dolvi in the West.

Any plans to expand your reach in the near future?  
We are looking for expansions in the North and are in the initial development stage, with detailed project feasibility underway. 
In the South, we are on course for a GU at Salem for GGBS.

The concrete precast market is projected to witness significant growth in the next few years. What are your observations and expectations? 
The precast market is still in the nascent stages in India and holds a lot of potential going forward. There are some excellent facilities that have come up in the South, such as KEF Infrastructure, Krishnagiri, who are also doing up prefab schools and hospitals etc. 
Since prefabrication helps completion of buildings faster with lesser dependence on labour, it is likely that the construction industry will adopt it rapidly in the coming years.
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