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Mar 22, 2013, 06.26 PM IST
Sanjay Ladiwala, President of Cement Stockists & Dealers Association of Mumbai told CNBC-TV18 the slowdown in the infrastructure space is pressurising cement prices.
The major sector in which we are seeing a slowdown is the infrastructure segment
Cement Dealers Asso Mum
Sanjay Ladiwala, President of Cement Stockists & Dealers Association of Mumbai told CNBC-TV18 the slowdown in the infrastructure space is pressurising cement prices. He also added that elections next year will give further direction to prices. Going forward, he expects cement prices to stay at current levels till the middle of 2013.
Here is the edited transcript of the interview on CNBC-TV18.
Q: For the first time in 12 years we saw a quarterly demand for cement perhaps falling. Do you think this is going to persist? What explains this fall? Is it entirely the economic slowdown?
A: The major sector in which we are seeing a slowdown is the infrastructure segment. Surprisingly so, because during the month of March we normally see hectic activity in this segment. There are deadlines to be met and March 31 is usually the deadline for many departments to finish their work. Therefore, it is a surprising development just now.
Hopefully, this trend should correct itself but because of the hurdles which a lot of infrastructure projects are facing, we are not seeing a push coming from this segment.
Q: Is this an instance of private sector infrastructure projects stuck for permissions or has it got anything to do with planned expenses by the government getting cut? The fiscal deficit for the current year which ends next week has been met because about Rs 1 lakh crore of planned expenditure has been cut. Is there any talk among the producers that government is consuming less?
A: Both the factors contribute to this lack of demand. In the private segment, we are seeing a lot of infrastructure companies who have their finances stuck in Build-Operate-Transfer (BOT) and Public private partnership (PPP) projects.
At the same time, the government finances are not in place and payments which were long overdue are also not coming forth. Besides, newer projects which were to come on stream are also slowing down. All these are contributing to the slowdown in infrastructure and that is the main segment.
Real estate as we know is flat and nothing much can be done about that. So this was the only segment on which there was hope and in the month of March if you see a slowdown, I don't know what will happen during the monsoon.
Tags: cement, Sanjay Ladiwala, Cement Stockists & Dealers Association of Mumbai, infrastructure , ACC
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