Cement companies upbeat over prospects post Telangana

Cement companies expect the division of Andhra Pradesh to help improve the industry's prospects.

Industry executives say the creation of Telangana will provide opportunities to boost cement consumption, which has fallen over the past year by about four per cent to 1.6 million tonnes per month in Andhra Pradesh due to political uncertainty and a delay in projects across sectors.

"There are likely to be new growth drivers for the cement industry both from Telangana and the rest of Andhra Pradesh," says K.V. Vishnu Raju, Chairman and Managing Director of Anjani Portland Cement, a leading cement producer. "This could be led by new demand for housing from non-resident Indians who have been traditionally investing in and around Hyderabad now wanting to make investments in others locations like Vizag, Vijayawada and Guntur."

He feels the national status being granted to the Polavarum project in the Andhra region is an important measure and will be a driver for several projects, particularly for building several canals.

The prospect of building a new capital, while it is still sometime away, could also be a huge attraction. Cement manufacturers say that back-of-the-envelope calculations show a new capital could cost anywhere between Rs 50,000 crore to Rs 1 lakh crore as it could involve building a new high court, a legislative assembly, a secretariat and housing facilities for government employees.

Given that it will take time to build a new capital from scratch, work would have to start in four to five years if one were to go by the 10- year timeframe. Right now it would seem a long way ahead. In fact, going by the developments in the state and anger in the non-Telangana region, it will be quite a challenge for the government to pacify and win over people from other regions. On Thursday evening, there were reports that as many as 14 state ministers from the Andhra and Rayalaseema regions could tender their resignations.