The demand for cement in Andhra Pradesh has dropped by over 50 per cent during the past two months due to the on-going agitation against the bifurcation of the State in the 13 districts of the Seemandhra region.
“The dispatches have now fallen to about 10 lakh tonnes in the State from over 20 lakh tonnes earlier. There were days when demand went up to 30 lakh tonnes,’’ NGVSG Prasad, President (F&A), NCL Industries Ltd, told Business Line on Monday.
Some companies which exclusively cater to markets in Srikakulum, Vizianagaram and Visakhapatnam are the worst hit along with firms which have plants located in the Jaggayyapeta region of Krishna-Guntur districts.
“The problem is not only demand. The raw material supply got hit as coal is now being either diverted/preserved for power production on a priority basis,’’ said an official of the Hyderabad-based cement company.
The access to imported coal is also curtained as it is mainly imported at the Vizag port.
“As a result, the operating capacities dipped from 60-65 per cent on an average to about 25 per cent for most players,’’ he added. The power cuts, due to the strike by the electricity employees in the last two days, will also deal a severe blow, especially to those units which do not have captive power plants, said industry sources.
The Telangana region, though peaceful during the past two months, has also not shown any appreciable increase in production or demand, because of the lull in the realty and infrastructure sectors.
Another important reason is the virtual stagnation in funding of Government-driven housing projects.
However, price of the building material has shot up by Rs 15-20 a bag of 50 kg. It is ranging between Rs 285 and 300 per bag in the region.
But demand is expected to pick up, especially with the monsoon season behind and the festival season round the corner, which usually augurs well for the construction activity and new projects, said industry sources.