Cement demand up 4.3% in first half

Domestic cement demand has grown 4.3 per cent in the first half of the current financial year, according to the figures released by the Cement Manufacturers Association (CMA).

The industry clocked despatches at 59.41 million tonne compared with despatches of 56.96 million tonne in the corresponding period of the previous year.

Cement demand for the entire year should cross 125 million tonne, said industry experts. "Looking at the good growth in despatches in the first half of the current year, an annual growth of 6 per cent is likely," said a senior executive from a cement company.

Cement despatches in September jumped 10.86 per cent at 10 million tonne against 9.02 million tonne in the corresponding month of the previous year.

Anil Singhvi, executive director, Gujarat Ambuja Cement, said, "Both in the urban as well as rural areas, cement demand for housing has been growing.

Demand from infrastructure sector has been sporadic and in different parts of the country depending on where the infrastructure project is being carried out."

While April showed a growth of 15.85 per cent in despatches, both May and June had posted a decline in dispatches, compared with despatch figures in the corresponding period of the previous year. Increase in July despatches was at 8.76 per cent on account of a late monsoon, while the growth in August was again negative.

A cement sector analyst said, "A growth of 4.3 per cent in the first half is lower due to negative growth in south." While the northern and eastern markets grew at a firm 8 per cent, the western region outstripped this rate by recording a 10 per cent growth in demand.

However, the central region witnessed a growth of only 2 per cent, while demand in the south was down by 4 per cent. Average domestic prices have also been around 10-12 per cent higher in the first six months, compared with previous year's prices.

"Except for south, price realisations have gone up by around 12 per cent across the country on the back of a firm demand," a cement sector analyst said.

Industry sources pointed out that the export opportunities for domestic companies are very good as demand in the Middle East has been high for the past few months and is likely to continue for the next couple of years looking at the hectic construction activity in the region.