Why are cement prices rising?
A strong growth in agriculture production in 9903 has triggered rural housing construction, resulting increased offtake. State governments are in a hurry to complete pending infrastructure projects like roads and bridges, with assembly elections round the corner. A number of incentives have been offered to the housing sector in the form of tax sops and cheap finance by the Union Budget 1999-2000. Repeal of the Urban Land Ceiling Regulation Act is expected to boost demand for houses, increasing cement consumption. The government’s thrust on infrastructure, including the proposed construction of 7,000 km of expressway, augurs well for the cement industry. Demand may grow 10% in the current year. There is a slowdown in new capacity addition. No new cement plants were ordered in the last couple of years. By 2000-2001, the demand is expected to overtake supply.
