Could you elaborate on the plans for restarting operations?
The Government has already given permission and we have started operations with those plants that are in remote locations. Even if it is operational, the demand is going to be low and it is expected to pick up after three to four months. And for the labour shortage to normalise, we expect at least six months period.
Indian infrastructure segment was optimistic of a revival in Q1 FY21, but the Covid-19 dampened it. Quantify the impact Covid 19.
The construction segment and the cement companies are running at 70 to 75 per cent capacity. After Covid-19 this will come down drastically. In the first three months, we can see 30 per cent production. And in the next three to six months period, the capacity utilisation is expected to be around 50 per cent. The demand could increase to 60 per cent in third quarter onwards. Overall, the current financial year would be a difficult one for cement and construction companies alike.
What are the opportunities for the precast segment in the new scenario?
In the precast segment, post Covid-19, the opportunity is more because precast requires less workers. Many companies would move towards precast construction. Precast industry is slowly maturing, the growth though was slow. Some residential buildings, especially the low-cost housing is shifting to precast. Apart from this, there is a lot of scope is for hospitals as the government will be spending a lot in hospital infrastructure. Also commercial buildings will start moving to precast like hotels, offices etc will move to precast. This opportunity is better for precast industries.
What about the projects under implementation currently?
The current infra projects will continue, but at a slow pace initial two to three months, primarily because of the shortage of migrant workforce. Every company would like to complete projects as fast as possible and tide over the lost time. Most of the infra companies have labour camps attached, however, whether the migrant workers will stay or go back to their villages after lockdown will determine the pace of the undergoing infra projects.
What is your company's main focus now? Do you see higher demand from the hospital segment in the near future?
Our focus is right now on roads and metro projects in the state capitals. The Government will continue its spending on metro lines. However, the government may divert a lot of funds to healthcare. If there is demand coming for setting up hospital infrastructure, definitely we would like to be associated with such projects. The new metro lines or project announcements most likely be deferred for the time being. But the state governments would be looking at more infra projects including hospitals in the short and medium terms.
- RENJINI LIZA VARGHESE