In an interview with CNBC-TV18’s Latha Venkatesh and Sonia Shenoy, HM Bangur, MD, Shree Cement, outlined the company’s plans to increase its capacity as well as its sales outlook going forward.
Within three months, we will be commissioning our Chhattisgarh unit and our capacity will increase to 24 million tonne,” he said. “Next year I am expecting sales to be about 17.5-18 million tonne.”
Below is the transcript of the interview on CNBC-TV18.
Latha: You have just commissioned some capacity, haven’t you? Can you take us through your total capacity now?
A: Our total capacity is 21 million tonne right now. Within three months, we will be commissioning our Chhattisgarh unit and our capacity will increase to 24 million tonne.
Sonia: Can you just tell us about what your sales guidance is for next year because after this whole Make in India theme by the government there is expectation that the sales for the entire cement sector could go up quite a bit. What is your own guidance?
A: Guidance is very strong word. My own feeling is that definitely the government is saving money, fiscal deficit will come down and more expenditure will be done on the capital side and revenue side expenditure will come down. Government has clearly announced good infrastructure projects, good spending on the housing.
For the last five years or so cement industry was left without real growth. Capacity was increasing expecting 7-8 percent growth, real growth in the market was around 4-5 percent. In the process used capacity is remaining idle. I hope this government may increase the growth to 10 percent or so.
Sonia: Shree Cement’s own volumes were about 14.5 million tonne last time, say in the next 6-12 months how much could the volumes grow?
A: Last year, it was 13.5 million tonne, this year (March ending) we will be doing around 15.5 million tonne. Next year about 17.5-18 million tonne is what I am expecting because of the normal growth in the Northern region where we are strong. We are starting new units in the East where we expect some market share.
Latha: Did you have to take a price cut in February?
A: Price cut in February was there. It is not because we had to take it, market was not lifting it. Market suddenly because of various factors, in the second half of February the market became dull and the competitive pressures were on and now it (price) is market-related; in March it can go up, it may remain same.
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