In December 2008 all-India cement production and dispatches rose 12.6% and 12.7% y-o-y, respectively. Strong volumes in the North and East regions were dragged down by a slump in the West.
Some progress in infrastructure space has propped up demand in December 2008. Part of the growth can also be attributed to the low-base effect – December 2007 recorded a 5% y-o-y growth.
All-India capacity utilization was 92% (97% in December 2007 and 84% in November 2008). The South recorded the lowest utilization rate of 87% and the Central region was the highest at 98%. Capacity during the month increased by 0.5m tonnes (in the southern region) to 207m tonnes.
Combined volumes of the top five companies for December 2008 increased by 11.6% y-o-y, on strong growth figures from ACC and Ambuja. ACC’s robust growth was a result of the base effect (December 2007 decline of 4.8% y-o-y).
Aggregate YTD dispatch growth, however, has been just 2.7% y-o-y. Of the out-performers in y-o-y volume growth were the North-based JP and Shree; others were ACC, Kesoram and OCL.
Prices have slid by Rs3-5 a bag in the South, East and Central regions, chiefly from constant supply pressure. Pune has seen prices sliding ~Rs10 per bag.
Demand in Dec-Jan has been low on a severe slowdown in the real estate sector. Dealer feedback suggests that demand may pick up only by March 2009.