Cement production in the country is slated to fall by 25 to 30 per cent this fiscal as Covid pandemic has sucked demand from end user industries. This is billed as the steepest fall for the industry in any year. Capacity utilisation in FY21 is seen at 40 to 45 per cent. Even before the onset of Covid-19, cement producers were wrestling with an economic slump. In the last fiscal, cement output fell by 0.8 per cent as against a growth of 13.3 per cent registered in FY19.
"The cement industry was already impacted by the general economic slowdown prevalent in the economy and now with the Covid-19 pandemic prevalent, it has further added on to the weakness present in the industry even though the macros seem strong in the long term. Cement production is usually closely in-line with demand which is also poised to fall sharply given the lockdown related restrictions present as the virus is showing no signs of abating. The nationwide lockdown has come at the time when construction activities is at its peak and it will be followed by the monsoon season where again the construction activity will be impacted thereby affecting entire dynamics of demand-supply for cement", said a report.