Birla Corp posts a dismal outlook for Indian cement industry

Mumbai : Birla Corporation has announced that it is anticipating a bleak outlook for the cement industry in 2011-12 as the new capacities will only burden an industry that is already suffering from oversupply and a rise in the input costs. Birla Corp chairman Harsh Lodha said, “With the surplus capacity rising over the next few quarters due to new expansion commencing operations there is a concern on the capacity utilisation and on the sustainability on the sale realization.” There has been a capacity addition of over 100 million tonnes in India during the past 3-4 years. This has resulted in pressure on price realisation and also on capacity utilisation during 2010. Birla Corp will be one of the companies who will add to the industry capacity during 2011. The 1.2 million tonne brownfield project at Chanderia and 0.6 million tonne addition at Durgapur are likely to be commissioned by this December. It is also expanding its cement capacity from 6.3 lakh tonne to 8 lakh tone at its Raebareli plant. The company has also applied to the pollution control authorities to increase the Chanderia capacity by another 1.5 million tonne. “After completion of all the expansion projects, the effective annual capacity, including the proposed plant at Chanderia, will stand enhanced to 10.8 million tonne,” Lodha said.