Negative November growth for Indian sector?

Negative November growth for Indian sector?
Published: 02 December 2010

The Indian cement industry is likely to get into the negative territory of growth in November. Following statistics being published by local cement majors, analysts fear November might turn out to be a month of negative growth.

“Given the fact that domestic cement majors have reported negative growth in their sales in November, it is likely that the industry would also end up with negative growth in November,” said the research head of a Mumbai-based broking house.

The cement majors control almost half the industry’s capacity. Domestic major UltraTech was hit the hardest as its sales plunged 9.25 per cent to 2.66 million tonnes (mt). This was followed by Swiss cement major Holcim-owned Ambuja Cements, which was hit by a transporters’ strike. Ambuja reported a dip of 8.65 per cent in its sales at 1.42 mt in November against 1.55 mt in the corresponding month last year.

Similarly, Shree Cement, a dominant player in the north, continued to feel the pressure as its despatches were down 7.62 per cent from 700,000t to 650,000t. The sales of JK Lakshmi, another north-based player, were down five per cent, while unconfirmed reports suggest that growth of Jaiprakash Associates, a north-central company, has been substantially pulled down from as high as 60 per cent to around 13 per cent YoY.

Only Ambuja’s sister concern, ACC, managed to increase its sales volume by 4.82 per cent in the month.

The industry figures for November would be declared by the Cement Manufacturers’ Association next week.