India: feeling the heat
The trend witnessed in the quarterly performance of India’s cement companies during January-March 2013 indicates that the industry is still far from being out of the woods.
While the Competition Commission of India (CCI) barred cement companies from collecting and circulating data of cement production, consumption and prices since June 2012 following cartelisation allegations, performance data suggest that the industry continues to feel the heat of the slowdown in the country’s infrastructure and construction sectors. For cement manufacturers, which have almost doubled capacity in the past five years, an upturn in the cement market is much-needed.
January-March 2013 snapshot
The January-March quarter is typically a high-growth period for India’s cement sector as construction activities are in top gear. The period also brings the financial year to a close, encouraging central and state agencies to realise their promised announced projects. This helps the industry not only to sell more cement but also charge higher prices, benefitting their balance sheets. As a result, both company executives and sector analysts were looking forward to a turnaround in the quarter.