Sluggish demand has slowed cement sector growth: K M Birla

Says cement industry was snowed under slow rural economy

UltraTech Cement, India's largest cement maker with a capacity of 65.1 million tonne per annum, said that poor demand amid continuous rise in input costs and logistics have slowed down the sector's growth.

Addressing shareholders at the company's 15th annual general meeting, Kumar Mangalam Birla, chairman of Aditya Birla group, said, "Sluggish demand, a continuing rise in the price of input material and logistics put brake on growth. Consequently, the cement industry's growth stood at a mere 3.5%."

He added that though the Indian economy virtually entered a sweet spot, the cement industry was snowed under by the slowdown in the rural economy, and lack of investment from both the private and public sectors. 

UltraTech has been quite aggressive in expanding through inorganic route. Over the last one and a half year the company acquired units of Jaiprakash Associates in Gujarat and Madhya Pradesh.

The company pumped in nearly Rs 8,000 crore to acquire units with a production capacity of about 10 million tonne.

The company plans to reach an overall size of 71.2 million tonne by the end of the current financial year.

Birla said, "Going forward, with the government's thrust on infrastructure development, housing sector, smart cities and roads - your company is well positioned to meet the expected rise in demand and participate in the next phase of growth in the country." On BSE, shares of UltraTech traded strong and closed at Rs 2,945, up 1.5%.