India January cement sales: double digit growth

India January cement sales: double digit growth
Published: 02 February 2010

Indian cement makers today reported double-digit growth in January sales driven by increased demand from housing sector, especially of low-cost homes, and infrastructure.

Shree Cement JK Lakshmi and Jaiprakash Associates have recorded better sales growth in the month, while major players like ACC could only witness a marginal increase.

Jaiprakash Associates saw its January sales jumping by 60 per cent to 1.165Mt, Shree Cement reported a 17.66 per cent rise in sales at 882,000t, and JK Lakshmi Cement clocked a 38 per cent increase in sales at 506,000t. But ACC reported almost flat growth at 1.91Mt against 1.89Mt last January.

Generally, cement sales start picking up from January and the peak period ends with the arrival of the monsoons in June.

Meanwhile, companies are anticipating poor margins as the industry is adding its highest-ever capacity in a single year. During 2008-09, the installed capacity was 204.8Mt, and this is likely to touch 270Mta by the end of this fiscal.

Against this, the annual demand was 178.2Mt in 2008-09 and is expected to be 198Mt by the end of the current fiscal and 220Mt by next the fiscal.

Though the industry watchers are projecting a 10 per cent growth in demand in the next fiscal, there will still be a wide supply-demand gap, which is bound to have a bearing on the cement makers’ profitability.