The August sales of ACC and Grasim Industries - India’s two biggest cement makers - witnessed their first big decline in about a year as demand for the building material slumped.
ACC, the country’s largest, registered a 2 per cent fall in its August sales to 1.54 million tonnes (MT), the sharpest decline since February 2007.
The company’s production declined by 5 per cent to 1.52 MT. According to statistics available on the company’s website, ACC’s sales in May was down by 1.1 per cent even as output rose 1.65 per cent. The company is a part of Swiss cement major Holcim.
Grasim Industries, part of the Aditya Birla group, was hit harder. The company’s production plunged by 8.87 per cent to 2.12 MT and despatches nosed dived to 2.2 MT, down by 5.39 per cent in August.
The last time the company saw a major y-o-y sales decline, according to the data available from the company’s website, was back in November 2007, when production was 5.48 per cent less whereas despatches tumbled by 6.84 per cent.
When contacted, the spokesperson for Grasim Industries declined to comment, while calls to OP Puranmalka, the company’s chief marketing officer, did not elicit any response. Similarly, ACC’s spokesperson did not offer any comments.
Experts said that on the basis of month-on-month performance, they were expecting a slowdown but the year-on-year fall was surprising. “This is an indication of demand slow down,” they said.
According to them, shutting down of plants for maintenance activities could be one of the reasons as normally cement companies shut down operations for 15-21 days during monsoon. At the same time, experts did not rule out the possibilities of a deliberate cut down in production.
Analysts added that at a time when Ambuja Cements - ACC’s sister company under Holcim - has shown rise in production and sales in the same month, it is interesting to observe why ACC performed poorly.
Ambuja registered a rise of 6.9 per cent in production at 1.2 MT, while its despatches for August were up 7.7 per cent at 1.24 MT.
