A study of Demand and Supply of Cement in Chennai G Frederic Edmond, Research Scholar, Sathyabama University & Dr.

S Sheela Rani, New College Cement industry, plays a major role in the growth of our nation. India is the second largest cement producer in the world after China It is also predicted that the cement production in India would rise to 236.16 MT in FY11. It's also expected to rise to 262.61 MT in FY12. In Chennai, Cement demand is increasing every year due to augment of construction activities. The construction activities are significantly improved in and around Chennai for the last few years. With the influx of IT and ITES and also government initiation on infrastructure projects, housing facilities and road networks, the cement industry is growing at an enviable pace. More growth in the cement industry is expected in the coming years mainly from infrastructure projects like ongoing metro rail project, airport modernization and proposed financial city at Chennai. Most of the leading multinational companies starting from mobile phone to car manufacturers have been investing in Chennai due to easy availability of land (nearby Chennai), availability of employees and support of the local government. Chennai international airport is an added advantage. IT industry is booming and lot of medium and higher information technology companies are having their base in Chennai. Due to more employment opportunity in IT and ITES at Chennai, more people are penetrating towards Chennai to work from rural areas. As most of the IT and ITES companies are in the outskirts of Chennai, it is indispensable to have a dwelling for the people to reside. Chennai is growing significantly, on OMR road, GST road and now extension is towards Sriperambadur. Demand of cement is increasing to an average of 8 to 10% annually as per the CRISIL report. Even though manufacturers are enlarged their production capacity thinking of wrong presumption, it is difficult for them to produce cement to the level of their capacity installed due to less absorption in the market. The cement consumption of Tamilnadu is approximately around 18 to 19 lacs tons per month, but capacity is 33 Million tons per annum or 28 lakhs per month. Production capacity is more than the consumption of the city/ state. If cement manufacturers produce full capacities market may not absorb, which in turn affects the price of the cement. Manufacturers are maintaining supply discipline due to long maintenance in their factories. The prevailing rates of cement in Chennai are Rs 290- Rs 300. This study helps to have the knowledge on cement consumption and capacity in Chennai. Key words: Cement, cement capacity, cement prices Address for communication: G Frederic Edmond 6/1, 4th Main Road, Kottur Gardens, Kotturpuram Chennai 600 085, Tamil Nadu. India. Mobile 94440 74752