Political impasse hurts cement demand

Chennai : Cement consumption in India fell for the first time in nearly two decades during the April-June quarter as political impasse in large consumer states holds up infrastructure and realty projects. Demand fell by 0.68% during the period compared with the corresponding period last fiscal. Cement consumption is a key indicator of economic activity.

The Telangana issue in Andhra Pradesh and mining scams in Karnataka took a toll on the cement offtake in these two big consumer states. In Andhra Pradesh, demand contracted by 21% and in Karnataka by 8.04%, according to data from Cement Manufacturers' Association (CMA). Two manufacturers, Gujarat Ambuja Cement and ACC, are not members of CMA and hence their data is not included.

"This is the worst phase we are seeing in post-liberalized era. The last time it contracted was in the early 1990s when there was economic turmoil," N Srinivasan, vice-chairman and managing director, The India Cements (ICL), said.