Cement despatches up 17 % in August

The domestic cement industry has clocked a despatch growth rate of 17 per cent in August. This is in sharp contrast to the industry leaders’ estimates of 9-10 per cent.

The 226-million-tonne industry despatched 15.44 million tonnes during the month compared with 13.2 million tonnes during the same period last month.

The industry produced 15.52 million tonnes which is 17.75 per cent more than what it produced last year in the same month.
 

PACKAGING GAIN Showing despatch growth rate during FY10
Month	Despatches*		Growth (%)
	2008-09	2009-10
Apr	14.73	16.65	13.03
May	14.86	16.46	10.77
June	14.80	16.70	12.84
July	14.51	15.95	9.92
Aug	13.20	15.44	16.97
* All figures in million tonnes Source : Cement Manufacturers' Association

According to the chief commercial officer of ACC, Jayanta Datta Gupta, the rise in government’s expenditure on infrastructure and to some extent delayed monsoon have triggered such a robust growth in the month.

For instance, Ambuja Cements having a pan-India presence registered a growth of over 15 per cent in its despatch growth while Aditya Birla group firms, comprising Grasim and UltraTech Cement, registered an over 32 per cent growth in despatches.

Similarly, north majors Jaiprakash Associates, Shree Cement and JK Lakshmi Cement continued with their robust despatch growth of 43 per cent, 30 per cent and 15 per cent, respectively. ACC, due to its constraint capacities, could manage a despatch growth of only 7 per cent in August.

Ajay Kapur, head of marketing and commercial services at Ambuja Cements, told Business Standard earlier that the demand for cement from small towns of semi-urban regions remained strong as delayed rainfall did not let construction activities go slow. “We also sensed a slight improvement in demand from urban centres too,” he had further added.

According to industry analysts, one of the factors behind the high growth in August is the low base. It was during this time last year that the industry’s growth was on a decline due to poor demand for the building material.

He also added that high growth is also because of the low base during the same time last year. When asked about the sentiments among rural customers, Kapur pointed out that dampening impact will come after a gap as crop will take time to come.