A stable state government, large-scale rural infrastructure activity and increased demand from home builders have transformed Bihar into one of the fastest cement markets in the country.
Cement consumption has surged as much as 35% in 2009-10 after being stagnant between 2006 and 2008 and having had a 13% rise in 2008-09, companies operating in the market said.
Neeraj Akhoury, senior vice-president (sales) at Lafarge India, said year-to-date growth has been faster than that seen last year.
“This is largely due to government projects in rural areas, especially in village and small-town levels,” he said over the phone. “The growth of individual home builders has been very favourable.”
His view was echoed by Rahul Kumar, chief financial officer at Delhi-based Jaiprakash Associates Ltd, which claims a 12% market share in the state, the third biggest behind Lafarge and Swiss-based Holcim Ltd owned ACC Ltd.
“Industry estimates put Bihar growth at 35%, the fastest in the country, much ahead of Uttar Pradesh, which was the next fastest with 20% growth,” he said.
The expansion is more than three times the national average of 10%.
“This growth has come not because of big infrastructure projects, but because of robust rural demand, demand from home builders and small businesses,” Kumar said.