ACC sees exports decline

ACC sees exports decline
Published: 24 March 2009

ACC, which has seen a decline in exports for the first time in seven years, expects only state-led consumption to benefit cement firms in an era of high costs and soft demand.

"If the new government continues to support infrastructure and realty sector and recent announcements are not abolished, then the industry will benefit in the long run," said J DattaGupta, ACC’s head of commercial services.

India’s largest cement maker by capacity saw its exports decline in absolute terms in the October-December quarter, although Mr DattaGupta didn’t specify further.

"The recent spike in cement prices is due to a rise in demand and will remain stable at the current levels till the monsoon," he added. But, there will be around 46 million tonnes of additional capacity which will arrive in the market towards the end of the year and could bring down capacity utilisations.

Although the cement prices may be reasonably stable, the bunching of fresh capacity in the second half of 2009, could cause a supply overhang.

Recently, the central government and the RBI announced fiscal and monetary measures to revive growth. The demand and dispatch figures rose since January due to a sudden growth in government-related infrastructure projects and low cost housing. The Maharashtra government has sanctioned to build about 30 lakh low cost houses in Mumbai.

ACC’s earlier announced expansion plans are on track and there is no slowdown in its cement business, said Mr DattaGupta. "We will complete all our projects on time as many projects will be over in the current calendar year," he added.