Economic slowdown: ACC shuts down kiln at Gagal for clinker stock management



Dharamsala: Economic slowdown in the country is showing clear signs of direct impact on industry in Himachal as well. While on the one hand there are reports of work force being laid off, certain industries have been forced to temporarily stop operations. According to sources, poor cement demand in both Himachal Pradesh and Punjab has forced ACC to shut down one of its kilns to balance its clinker stocks due to increase of clinker stocks at its Gagal works. Both Himachal and Punjab have been showing negative cement demand of approximately 8% as compared to last year.

The poor demand scenario coupled with duty-free and CENVAT (CVD) free imports has resulted in the clinker stock at Gagal plant of ACC increasing from August onwards to reach a high level in December,  forcing the company to shut one of it’s kilns for 15 days.

Company top officials said they were hopeful that the recent positive initiatives taken by the government to improve liquidity and catalyse construction activities would help the cement industry. However, they said they expect imposition of   CVD and SAD on imported cement from Pakistan to provide a basic level playing field. “The government could also consider rationalizing the cement excise duty structure, as well as providing abatement of at least 40% as is the case with many other commodities. While the recent reduction in excise duty rate is very much welcome, the company expects it to be also extended to clinker as a matter of equity,” said J Datta Gupta, Chief Commercial Officer, ACC.

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