Growth hits a 4-year high in the region
The growth of cement consumption in the eastern region in FY09 has outpaced the other regions for the first time in the last four years. Cement manufacturers in the region said it was mainly on the back of an unprecedented spurt in demand for the building material which made the eastern market outperform the rest of the country.
The eastern market, comprising the Northeastern states along with Bihar, Jharkhand, Orissa, Chhattisgarh and West Bengal, registered a rise of 11.32 per cent in cement consumption at 28.21 million tonnes. The region registered a growth of 5.62 per cent last year.
The consumption in the northern region grew by a mere 4.77 per cent, whereas in the South, West and Central regions, it grew by 10.37 per cent, 5.36 per cent and 10.43 per cent, respectively.
R P Gupta, managing director of the Orissa-based Shiva Cement, said, “Post November, the region witnessed an unprecedented demand for cement. Since the region is dominated by rural and semi-urban areas, the impact of recession was not as pronounced here as it was in the metropolitan centres. Demand from housing and infrastructure projects boosted the demand.”
For instance, against the national consumption growth rate of 8.4 per cent in FY09, cement consumption in Bihar rose 12.58 per cent to 5.1 million tonnes, Jharkhand registered a growth of 16.48 per cent at 3.11 million tonnes. Similarly, Orissa and Chhattisgarh witnessed a rise of 15.92 per cent and 8.92 per cent, respectively.
Domestic cement giants including ACC, Lafarge, Ambuja Cements and Grasim have their units in the east and hold reasonable market shares in the region along with the regional players.
Units in Chhattisgarh take care of most of the cement demand in the region.
| TOP OF THE LOT Consumption growth of the five regions in the last five years | |||||
| Year | North | South | West | East | Central |
| 2004-05 | 24.25 (6.08) | 33.43 (4.37) | 24.58 -9.14 | 20.39 -16.71 | 20.40 -7.59 |
| 2005-06 | 27.05 (11.54) | 39.36 (17.73) | 25.90 -5.37 | 22.66 -11.13 | 20.57 -0.8 |
| 2006-07 | 29.88 (10.46) | 44.80 (13.82) | 28.27 -9.15 | 23.99 -5.86 | 22.40 -8.89 |
| 2007-08 | 33.51 -12.14 | 49.15 -9.7 | 32.23 -14.0 | 25.34 -5.62 | 23.76 -6.07 |
| 2008-09 | 35.11 -4.77 | 54.25 -10.37 | 33.96 -5.36 | 28.21 -11.32 | 26.24 -10.43 |
| All figures in million tonnes; Figures in brackets - % growth Source : Cement Manufacturers' Association | |||||
Ashok Gutgutia, managing director of the Burdwan-based (West Bengal) Burnpur Cement, said, “There has been hectic activities on the infrastructure front going on in the region. Looking at the present demand, it is likely that in the monsoon too demand will be comparatively better.”
In the north-eastern region, players said demand is exceeding supply. Kamakhya Chamaria, managing director of the Assam-based Barak Valley Cements, said, “Government projects are the main propellar of demand. Demand is outpacing supply in the region.” In Assam alone, the cement consumption jumped 57 per cent to 1.68 million tonnes in FY09 against 1.07 million tonnes last year.
The prices are ruling firm in the region, around Rs 235-240 for a cement bag of 50 kg. However, in states like Assam and other north-eastern states prices are as high as Rs 280-290 per bag.
