Cement output, sales jump over 12% in FY10

Cement output, sales jump over 12% in FY10

New Delhi: Beating industry and market expectations, both cement production and sales grew by 12% each at about 160 million tonnes last fiscal driven by higher demand from infrastructure and realty sectors.

Cement production in India, which is the world’s second largest producer after China, increased by 12.37% at 160.31 million tones during the last fiscal from 142.65 million tones in 2008-09, according to the data released by the Cement Manufacturers Association (CMA) on Friday.

Sales also grew by 12% at 159.43 million tonnes against 142.23 million tonnes during the period under review.

Industry and analysts said sales growth was better than expected, but cautioned that it would be difficult to maintain this growth momentum in the current fiscal.

Former CMA president HM Bangur said sales growth was “definitely" better than expected as the industry was anticipating lower volume in the wake of the global economic crisis. “India was hardly impacted in the slowdown and this has helped the industry to record better growth," said Bangur, who heads the Kolkata-based Shree Cement.

He, however, said sales in the current fiscal could be 9-10%. “Sales in 2009-10 was better than expected. During the January-March quarter, most of the players have done very well on account of higher demand from infrastructure and construction sectors," a Fitch analyst said, adding it would be difficult to maintain the pace of growth this fiscal because of base effect.

The demand for cement grew because of revival in the housing sector, which was facing slowdown due to the global recession, and government’s increased focus on the infrastructure sector including roads and highways.

Most cement manufacturers recorded double-digit growth in 2009-10. The Aditya Birla Group recorded 15% growth in sales in 2009-10 at 37.22 million tones against 32.34 million tones in 2008-09.

Shree Cement, the largest manufacturer in the Northern region, registered a 20.66% year-on-year growth in sales at 9.36 million tones in 2009-10 as against 7.75 million tones in 2008-09.

Jaiprakash Associates saw its sales soaring by 47% to 11.21 million tonne vis-à-vis 7.64 million tones in 2008-09.