INDIA: Cement demand will pick up by 2014, says Maloo

NAGPUR: Murli Industries, a city-based business group, which recently forayed into cement sectorplans to double the capacity utilization of its plant to 80% by 2012.

The company came up with a 3 million tonne a year plant at Chandrapur in 2010 which is now being run at 40% capacity. A 50 MW power plant has also been set up as a part of the venture.

Company's executive director Murli Maloo was conferred with Emerging Entrepreneur for 2011 award by Power Brands at a function held in London. Power Brands is a private research firm on Indian business brands headed by management guru Arindam Chaudhari. The award was received on Maloo's behalf by a company's representative in London at a function held on December 12.

Talking to TOI after receiving the award, Maloo said that the cement industry was expected to remain sluggish in the country till 2014. However, the western region which includes Maharashtra and Gujarat has scope of growth due to considerable demand-supply gap in the region.

There is a total demand of 20 million tonnes a year in the western region but the production stands at 12 million tonnes. Chandrapur is a major cement cluster with Murli Industries being the only greenfield project here in last 10 years.

"The overall demand is sluggish due to low infrastructure work carried out throughout the country. The situation is expected to improve only after 2014. Another 50 million tonnes capacity is declared to be added in the country's cement sector. The present installed capacity is 200 million tonnes," said Maloo.

The plant at Chandrapur has been set up with an investment of Rs 1,000 crore of which 70% is debt. About the challenges faced by the industry, he said rising interest rates were hitting the margin. Supply of coal, which is the major raw material for the industry, has been a constraint too. Western Coalfields Ltd has not been providing adequate quantity under the linkage system. Linkage is assured coal supply to an industry.

However, linkage itself is fixed at 75% of total requirement and the amount supplied finally is even less at only 25% of the linked quantum, said Maloo. Rest of the requirement is met through e-auction and imported coal which is a costly proposition, he said.

Murli Industries, which started off with a solvent extraction plant in 1992, now has stake in paper business too, with the total turnover standing at Rs 1,000 crore.