Cement despatches grow 11% in Dec

Record highest growth of 12.78% sequentially as demand from infrastructure, housing rises

The 240-million-tonne domestic cement industry has returned to double-digit growth on the back of rising demand, as peak consumption season sets in.

The despatches in December were the largest so far in the current financial year at 17.74 million tonnes. With this, the industry has recorded the highest sequential growth rate at 12.78 per cent, whereas on the year-on-year (y-o-y) basis, after a gap of three months since August last year, the growth was in double digits at 10.8 per cent.

The offtake during December was higher than the industry production of 17.51 million tonnes. Industry analysts said inventories helped fulfill the demand for the building material.

The northern, eastern and central regions of the country did well. Infrastructure demand, especially from roads and power projects, fuelled demand.

Amrit Lal Kapur, managing director, Ambuja Cements, said, “Demand from infrastructure projects and housing has put the cement industry on over 10 per cent growth path in December. We expect to end the current year with a double-digit growth.”

In November, the m-o-m growth was a meagre 2.34 per cent. Compared to it, growth in December was 12.78 per cent.

In September, the despatch growth was down at 6.2 per cent. However, the later months of October and November witnessed rising demand. Most players, except the Holcim group companies - ACC and Ambuja, witnessed growth.

Sumit Banerjee, managing director of ACC, said, “The double-digit growth is not a surprise for us. I am unhappy ACC could not participate in this growth due to capacity constraints and shortage of railway wagons.”

The high growth in December came despite a high base of 12.11 per cent growth in December 2008. “The December numbers are substantially good, as there is no low base effect as was witnessed in the first half of the current financial year,” said an analyst with a domestic brokerage house.

According to market observers, the current month of January is expected to see a growth of above 11 per cent.