Mahendra Singhi considers COVID-19 impact on the Indian cement industry

Mahendra Singhi considers COVID-19 impact on the Indian cement industry
07 May 2020

Mahendra Singhi, president of India’s Cement Manufacturers Association and managing director and CEO of Dalmia Cement (Bharat) Ltd, opened Cemtech’s third live webinar yesterday.

Mr Singhi started by recognising the severe impacts caused by the COVID-19 pandemic. In India, for example, the scale of the nationwide lockdown is the largest ever seen. As a result, the pace of its economy has considerably slowed in recent months and GDP may contract 0.5-2 per cent YoY in the FY21. However, the economy may be in a good position to recover from October 2020 onwards.

Moving on to the Indian cement sector, Mr Singhi noted how cement plants have been supporting employees, local communities and families through the crisis. Since 20 April, after the partial lifting of lockdown, production is also slowly starting to recover.

"Cement companies are now fully ready to solve the need of society and the need of the construction sector," said the CEO of Dalmia Cement.

However, he also noted the importance of migrant labour returning to work and a possible financial stimulus from the government to support the construction sector, which would help prop up cement demand.

While the average capacity utilisation for the sector during the FY20-21 is expected to be around 45-50 per cent, Mr Singhi noted how it will start to recover from the start of 2021. "From January 2021, we expect that [Indian] capacity utilisation may come to a level of 60 per cent," said Mr Singhi.

Elsewhere, he stated that the cost of imported fuels like petcoke and coal may fall by 15-20 per cent, which could provide some relief for the otherwise high fixed costs of the sector going forward.

Looking at the impacts of COVID-19 on sustainability programmes, it was stated that the pandemic may result in initiatives being postponed for a few months but not forever. Dalmia Cement, for example, is expecting a 2-3 month delay but still remains fully committed to its sustainability roadmap.

The full video of Mr Singhi's segment of the webinar is now available online to view. Cemtech's next live webinar will focus on digitalisation, click here to register for free.

Published under Cement News