Zuari Cement is pressing ahead with new capacity plans in three Indian states despite current market challenges, citing huge long-term potential for domestic cement consumption.

The Italcementi group company is setting up a grinding unit in Auj and Shingadgaon in Solapur (Maharashtra), a terminal in Kochi (Kerala) and a 3Mta integrated cement plant in Gulbarga (Karnataka).

“The INR2500-crore capacity augmentation will go on in spite of the tough market conditions now, as we believe that there is huge potential going forward,” Krishna Srivastava, Whole-time Director of Zuari Cement told Business Line India.

Despite south India possessing 150Mta of cement capacity, consumption only stands at about 70Mt, causing a significant supply-demand imbalance. Sluggish demand in this part of the country is attributed mainly to delays securing clearances of infrastructure projects and lower government spending.