Cement despatches up 10.7 per cent in May

The domestic cement industry has maintained a growth rate of over 8 per cent for the seventh consecutive month with a despatch growth rate of 10.7 per cent during May (year-on-year) at 16.45 million tonnes. The 218-million-tonne industry, which has over 50 cement manufacturers, produced 16.67 million tonnes during the month, 11.95 per cent higher over the same period last year.

However, the growth rate compared to April has slipped. In April, the industry witnessed a robust despatch growth rate of over 13 per cent. Industry analysts pointed out that performance is in line with expectations and growth in May is relatively low.

Hari Mohan Bangur, president, Cement Manufacturers’ Association, said, “The numbers are not discouraging. The elections in May is one reason for despatches being low as transport was an issue and at the same time labour problems at construction sites during this time affected growth.”

However, he ruled out that this is yet another beginning of a downturn in demand, similar to what was seen in the first half of FY’09. “The industry will see a growth of 8-9 per cent during FY’10,” he added.

Though exports and region-wise details are yet to be released, a section of industry analysts said some problems in demand from south could be the reason for the lower growth.

They added that exports were banned during the same period which kept gro-wth down last year. But this time there were no such problems. They point at fewer post-poll construction activities which could be a factor keeping the growth down.

During the month, the Aditya Birla group, which operates cement business through Grasim and UltraTech brands, registered a despatch growth of 19.49 per cent. Despatches of ACC and Ambuja Cements in May grew by 1.1 per cent and 8.26 per cent, respectively.

The average price in May across the country was Rs 245 for a 50 kg bag of cement.