Cement makers, after poor sales growth in the past three months, are likely to show some relief in September.
According to initial statistics from the top cement manufacturers and given the low base in the corresponding month last year, industry analysts said the industry might witness a six-seven per cent rise in sales.
In June, the industry posted growth of 2.5 per cent (year-on-year), dipping to 1.63 per cent in July. August saw a marginally better two per cent rise. During these months, the industry faced high base effect.
Sales of Ambuja Cements rose by close to nine per cent in September at 1.48 million tonnes, whereas these were flat last month. UltraTech sold 2.7 per cent more cement, while Jaiprakash Associates' despatches were 61 per cent higher. The entire industry's sales numbers would be out later this week.
"The growth is not on the back of rise in demand. Rather, it is due to the poor performance of industry in the corresponding month last year," cautioned an industry analyst with a domestic brokerage firm. She added that real demand had not yet come from the construction and infrastructure sectors.
Last year, due to delayed monsoon, cement sales remained strong till August. But as rains struck and spread to various regions, sales dipped by five per cent in September. The monsoon continued to have its major impact on cement demand this year, said analysts. However, they added that from November on, there were expectations of demand coming back.
| CONCRETE PLANS | ||
| SHOWING SALES GROWTH SO FAR IN 2010-11 | ||
| Month | Sales | Growth % (y-o-y) |
| April | 18.12 | 8.50 |
| May | 17.78 | 7.69 |
| June | 17.14 | 2.51 |
| July | 16.21 | 1.63 |
| August | 15.80 | 2.13 |
| All figures in million tonnes Change is year-on-year Source: Cement Manufacturers’ Association & companies | ||
| SHOWING SALES OF TOP CEMENT MAKERS IN SEPTEMBER | ||
| Company | Sales | Growth (%) |
| ACC | 1.58 | -3.07 |
| Ambuja | 1.48 | 8.98 |
| UltraTech | 2.85 | 2.71 |
| Jaypee | 1.17 | 61.0 |
| All figures in million tonnes Change is year-on-year Source: Companies | ||
Meanwhile, over the past month, prices have been up in the southern region, in the range of Rs 25-40 for a 50 kg bag.
From October 1, companies had intimated dealers for a further rise of Rs 15-25 in western and northern markets.
However, industry experts say the present market conditions do not support price increases. Especially, in the South, the region which would see a retreating monsoon in the December quarter, sustaining the price hike seems not possible, said a research head of a domestic broking house.
Taking the price rise into account, the national average price of a bag of cement is at Rs 225-230.
