India: Demonetisation of high value Indian rupee currency notes reduced cement demand by 45 – 50% in November 2016. Demand for cement fell across regions with the central region including Uttar Pradesh and Madhya Pradesh suffering the least, according to the Hindu newspaper. The decline has hit the industry when it was expecting an increase in demand stimulated by infrastructure development following the monsoon season.
A slowdown in real estate activity has particularly affected the cement industry as the majority of cement in the country is used by the realty sector. RP Gupta, chairman and managing director of Shiva Cement, said that contractors are finding it difficult to make cash payments for buying raw materials such as sand, bricks and stones as well as paying wages. Cement companies are reportedly trying to help dealers install bank or credit card payment machines to reduce cash-based transactions.