Cement sector to grow 6-7% in 2016: ACC

The cement major made the estimate during its 80th AGM today

ACC, a 30 million tonne cement player and part of the LafargeHolcim group of companies, has said that the cement industry will see a turnaround in 2016.

In its 80th Annual General Meeting (AGM), company's CEO & MD Harish Badami, said: "The upside of the cement cycle has started and volumes have certainly picked up. I think industry will grow by 6-7% in 2016 against 1.5-2% last year."

Pricing has been a significant challenge for the industry and ACC could not remain untouched. It was hit by decline in sales and profitability.

However, the company is hopeful that the sector is fast coming out of a long lull period.

According to Badami, with good monsoon forecast and lowering inflation the company is set to benefit going forward.

"Demand will pick up. Good monsoon forecass will help, especially in the rural and semi-urban regions. Several projects in these regions were stalled. ACC has significant presence in these regions," added Badami.

The company is also seeing growing demand for ready mix concrete in the urban areas.

ACC has announced a final dividend of Rs 6 taking the overall dividend payout to Rs 17.

Currently ACC is in final stage of commissioning its two plants in Jamul and Sindri. Upon commissioning, the company's overall cement making capacity will stand enhanced to 33.42 million tonne per annum in 2016.

According to ACC, the capacity utilisation is likely to improve. "The capacity utilisation will come back to 80-85%. That's where profitability of the cement companies rise."

On the National Stock Exchange (NSE), shares of ACC on Wednesday closed at Rs 1,468.95, up 1.47%.