Slowdown in cement; core sector grows 10% in March

Cement production slowed in 2006-07, with a sharp decline recorded in March, data from the index of six infrastructure industries showed today.

The overall six core sector index, which has a combined weight of 26.7 per cent in the index of industrial production, grew by 10 per cent in the month, as against 7.1 per cent in March 2006.

Cement production growth, which has a weight of 1.99 per cent in the IIP, fell this March to 5.5 per cent, as against 17 per cent in the same month last year. For the 12-month period (April-March 2006-07), production growth slowed to 9.1 per cent, as against 12.4 per cent in 2005-06. Cement industry executives expect the slowdown to continue in the coming months.

Commenting on the data, Manoj Gaur, president of the Cement Manufacturers Association of India, said a shortage of coal, which is the fuel for cement plants, had affected productivity for the second year running. "Only 60 per cent of agreed fuel supplies are coming through," he said.

Gaur attributed the March slowdown to a decline in construction activity in the real estate sector. "In addition, there could be problems related to logistics as well," he said.

The slowdown continued in April, with Gaur suggesting that growth in cement production remained at the same level of 5.5 per cent (11.92 million tonnes) as the previous month.

Electricity generation, which has a weight of 10.17 per cent in the IIP, increased by 8 per cent in March 2007 as against 3.4 per cent in the same month of the previous year.