Madras Cements expects a 20 per cent growth in its top line in the current financial year (2012-13) buoyed by expected cement deman growth in the south and the company’s renewed focus this year on a few states in the east and west. Capacity utilisation is also expected to go up by over 10 per cent during the year.

The cement industry has always gone through this demand – supply mismatch, since firms plough back some of their reasonable profits during high cycles to expand capacities. The same phenomenon has resulted in an over-capacity scenario in south. But, it is good that companies build up capacities in anticipation of future demand,” AV Dharmakrishnan, CEO, Madras Cements told Financial Chronicle. Until recently the company’s executive director – Finance, he was designated as its CEO from April 1, this year.

According to him, what had really impacted cement producers in the south was the sudden drop in demand in major cement consuming states like Andhra Pradesh.“Demand for cement in the state was growing at around 20 per cent YoY for about 7-8 years and it suddenly tumbled into negative growth phase due to several factors including political and financial. This March, it had just about come out of that negative phase and one has to wait and see on what course it takes in the coming months,” he highlighted.

This year the company will also become 100 per cent self-sufficient in captive thermal power generation, freeing its wind power capacity to be entirely supplied to the state grid.