India: ACC gains on strong cement dispatches in Nov

India: ACC gains on strong cement dispatches in Nov
Published: 02 December 2011

ACC has said its cement production for November has gone up 4% to 1.83Mt YoY. The company’s dispatches have also risen 6% to 1.83Mt when compared with the same period last year.

Yet, industry experts say cost pressures remain a cause of concern for the broader cement sector including ACC. Despite global coal prices which are currently at US$113/t levels easing from their average of US$120/t in the September quarter, cement players can’t reap benefits as the rupee has weakened against the dollar. Cement companies import around 40% of their coal requirement.

Also, freight costs for cement companies are at elevated levels. Apart from that, home finance rates have not shown any signs of easing, and there are concerns that demand for cement from a key user industry, namely real estate sector, may be sluggish in the short-term.

Simultaneously, Ambuja Cement has also said that it registered a 26% growth YOY in its production to 1.81Mt for November. The company’s dispatch also grew 29% to 18.3Mt mainly due to low base which prevailed during Nov 2010.