(Bloomberg) -- The Ramco Cements Ltd. said laborers who had fled to their villages to escape the pandemic are returning, allowing the Indian producer to complete its 35-billion rupee plan ($475 million) to add capacity after a 100-day hiatus.
The project, which aims to increase annual capacity to 20 million metric tons from 18.8 million tons, was about half done when Prime Minister Narendra Modi's shock decision to implement the world's largest lockdown forced workers to head to the hinterland.
The cycle is turning again, as lower wages and lack of work in the villages are prompting laborers to come back even as India is fast emerging the world's new virus epicenter. The country's economy contracted a record 23.9% in the June quarter but that hasn't deterred Chief Executive Officer A.V. Dharmakrishnan, who expects ample monsoon rains to revive housing demand.
Read more: India Posts Worst GDP Slump of Major Nations as Virus Spikes
“There's definitely recovery in demand,” he said in an interview. “But compared to volume growth from the previous year, we all have negative growth because there are lockdowns in different parts of the country.”
The stoppage in work added 2 billion rupees to Ramco's expansion costs, Dharmakrishnan said. As of March-end, the company had five integrated plants producing 12.49 million tons and as many grinding units processing 6.3 million tons, according to its annual report.
The company's shares gained 1.1% to 175.8 rupees at 10 a.m. in Mumbai after falling 9% on Monday.
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