Centre, TN’s infra push will keep India Cements on growth track: N Srinivasan
CHENNAI: India Cements is upbeat about executing projects in Tamil Nadu, on the back of the state giving impetus to housing and infrastructure development, said N Srinivasan, VC-MD, India Cements, at its 75th Annual General Meeting held on Wednesday.
“The new government in TN has started giving push to housing and infrastructure development. Andhra Pradesh and Telangana Governments are also implementing irrigation, road building and other infrastructure projects and new housing schemes. All these developments give room for cautious optimism for cement demand in the coming months,” he informed members, noting that the capacity utilisation would surge based on demand pick-up.
Srinivasan said in Q1 ended June 30, 2021, the company had reported an impressive performance braving the onslaught of second wave of the COVID -19. It operated at 50 pc against 35 pc in the Q1 of last year.
Observing that the Q2 capacity utilisation is slightly better, he said it is expected to improve further. In the Q1, due to the pandemic, the demand was badly affected in the main market, Kerala and it also suffered in TN. Still, India Cements managed to keep its head above waters, as the prices remained firm and also backed by the company’s cash and carry policy.
Exuding cautious optimism owing to the uncertain possibility of a third wave, Srinivasan said cement consumption would surge with the
Centre too driving infra projects.
The Budget for 2021-22, in his view, did not have a fixation on fiscal deficit. Rather, the focus is on growth and many schemes and infra projects were announced which included large infrastructure projects in the south, for the first time. The expansionary Budget has envisaged a 34 pc increase in capital expenditure and if the promised capex on infrastructure, roads, metro rails including in South takes place, there is scope for higher demand for cement.
Responding to queries from members on capacity expansion and debt reduction plan, he said the company, which is celebrating its platinum anniversary, would take up capacity expansion at the appropriate time, which is not far away.
It has plans for capacity de-bottlenecking in the plants in the south and also set up a new plant in Madhya Pradesh. The company has enough limestone reserves in south for expansion. Last year, it faced an unprecedented increase in the cost of coal. Power and fuel are the two major costs in cement production. It is gradually coming down and it will continue to reduce the cost. The company is literally a power producer having 170 mw capacity, he sought to point out.
Srinivasan was also re-elected for five years with requisite majority at the AGM. Earlier, the Board of Directors of the company, at its meeting held on May 24, 2021, approved his re-appointment for a further period of five years with effect from May 26,2021.