Most cement plants in India have witnessed high levels of capacity utilisation, with over 66 pwer cent of the plants operating at more than 75 per cent capacity between April 2004 and February 2005. Moreover, over 33 per cent of the cement plants were operating at over 100 per cent capacity during the above period, according to the data released by Cement Manufacturers’ Association (CMA). The burgeoning cement demand in the country over the past few months is being seen as a primary reason behind the high capacity utilisation. Industry observers also attribute it to high clinker production in many plants, as well as debottlenecking exercises. Industry observers pointed out that there have been cases where the actual capacity of cement plants has increased over time even as companies continue to report the old capacity details. "As a result, with growing production, capacity utilisation looks perked up, in these cases," explained industry observers.
A senior official from a major cement manufacturer from western India pointed out that although such high numbers may suggest improper reporting of plant-wise capacity, many plants are at present actually operating well above 100 per cent capacity. An analyst with a Mumbai-based brokerage firm pointed out that normally in India the capacity utilisation is better in the northern and eastern markets, while it is not that good in the southern plants.