Cement industry hits 10.5% growth in 2009-10

May 10, 2010: Buoyant demand from the infrastructure space and individual home builders in rural and semi-urban regions of the country has made the cement industry hit double-digit growth in 2009-10, after a gap of three years.

The industry with over 50 players despatched 199.98 million ton of the building material compared with 181.01 million ton in the previous year - a rise of 10.48 percent.

However, the year-ending month witnessed lower than expected demand as industry could clock only a growth of 8.33 percent. The despatches for the month stood at 19.63 million tons against industry's experts' anticipation of over 20 million tons.

Hari Mohan Bangur, chairman and managing director of the north-based Shree Cement, said, "Overall the industry managed to remain on the double-digit growth trajectory. As far as March performance is concerned, it is not a matter of concern as numbers keep fluctuating."

Industry analysts said this could be a cause of concern for cement makers as the month of March normally shows one of the highest growth as construction activities are at peak. They had anticipated a growth of over 10 percent in March. Moreover, last month growth is the lowest in the last three years. In 2007-08, March showed a growth of 8.53 percent which in 2008-10 grew to 10.35 percent.

According to analysts, there has been a slowdown in demand for cement in the northern and eastern region. "At the same time, the southern market could not improve as much as was expected," they added.

The industry added close to 40 million tons in 2009-2010, taking the production capacity to around 260 million ton from 219 million ton last year. In the current financial year, the industry is expected to add around 40 million tons more capacity to take it to 300 million tons.

The year saw consistently robust demand through the year which helped cement makers raise the prices too. Currently, the average national price of a 50 kg bag of cement is in the range of Rs 245-250.

Source: Business Standard