Cement output, sales jump over 12% in FY10

Beating industry and market expectations, both cement production and sales grew by 12 per cent each at about 160 million tonne 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 per cent at 160.31 million tonne during the last fiscal from 142.65 million tonne in 2008-09, according to the data released by the Cement Manufacturers Association (CMA) here today.

Sales also grew by 12 per cent at 159.43 million tonne against 142.23 million tonne 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 H M 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 per cent. "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 however, 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 per cent growth in sales in 2009-10 at 37.22 million tonne against 32.34 million tonne in 2008-09.

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

Jaiprakash Associates saw its sales soaring by 47 per cent to 11.21 million tonne vis-a-vis 7.64 million tonne in 2008-09.