Business Line reported that cement industry in Andhra Pradesh has been pushed into a state of uncertainty in 2012 by price volatility,demand blues and power cuts.
The industry captains seem to be more worried about infrastructural bottlenecks such as power shortage rather than price volatility and demand blues which are inevitable.
In all industry forums,the state government insisted that power cuts were only temporary but nothing was being done to solve the problem.But for cement companies,the future seems to be bleak as far as power supply is concerned.
The severe power cuts,especially since summer,with the worst case scenario of nearly 14 days power holiday,had a crippling effect on some of the smaller companies.This resulted in some resorting to lower production.In the case of newer companies,they had to buy at a higher tariff of up to INR 14 per unit,which was a big burden.
Mr K Ravi MD of NCL Industries Ltd said that"Power cuts in 2012 ruined the large cement industry.We wanted to deal with the problem by setting up a captive power plant for which we need water supply.There has been inordinate delays in clearing files which hit the industry hard.''
Apart from the power cuts,the industry was adversely impacted by dip in demand.Mr SVS Shetty CEO of Anjani Portland Cement Ltd said that"Actually,there was decline in despatches from Andhra Pradesh in 2012 compared to last year.''
Though the exact figures are yet to come,industry experts said that the decline could be 5%to 7%compared with last year.
