Sagar Cement, India Cement and Bharathi continue to defend their current cement prices despite public concerns about rising prices , saying the economic situation is out of their control. According to the Times of India, at a media briefing for cement producers, the producers blamed the current rising logistics costs, taxes, and high margins for distributors, adding that the key factors for the growth of the cement industry are the construction industry and the government's infrastructure investment program.
S Srikanth Reddy, chief executive of Sagar, predicts that demand in Telangana and Andhra Pradesh will grow by 10-18% in the next two to three years due to the government's massive infrastructure push. Tamil Nadu and Kerala will not grow by more than 5%, while Karnataka will grow by between 2% and 5%.
Although there will be some growth in the region in the short term, the cement industry in southern India is still facing great difficulties, especially in Andhra Pradesh and Telangana. Southern cement enterprises originally expected that the demand for cement would increase by a large margin, so they launched new production lines to expand production capacity, resulting in serious overcapacity. At present, the southern producers can only control the capacity utilization rate at about 60%, because the local market is more than nearly 50 different brands of cement, the competition is extremely fierce, and the price fluctuation is also very large.
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