Cement makers show robust growth in August

Contrary to the apprehensions of low demand in August from semi-urban regions, the initial statistics from top cement producers indicate a robust growth.

The industry expected low demand due to the arrival of monsoon in many parts of the country. But, the rain did not affect the sentiments and it, rather, helped in augmenting the demand further as construction activities did not slow down.

ACC’s spokesperson said the demand in August continued to be favourable and the northern region, in particular, showed better growth.

Industry sources had earlier expected the growth to be between 9 and 10 per cent in August against the trend of a 10 per cent plus growth in the current financial. The overall industry’s statistics will be released by the Cement Manufacturers’ Association (CMA) next week.

For instance, Ambuja Cements, having a pan-India presence, registered a growth of over 15 per cent in despatches while Aditya Birla group firms, comprising Grasim and UltraTech Cement, came up with 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, managed a despatch growth of only 7 per cent in August. These companies control almost half of the country’s overall manufacturing capacity.

Ajay Kapur, head of marketing and commercial services at Ambuja Cements, said, “The cement demand from semi urban regions remained strong due to late rain as the construction activities did not slow down. Moreover, there was also an improvement in demand from urban centres too.”

He also added that high growth is also due to 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.

Industry analysts maintained that on an year-on-year basis, despatch growth will be higher as several cement makers have added capacities. However, they further said, on a month-on-month basis, despatches are tapering off which suggest a decline in demand for the commodity.