Indian demand likely to remain robust in January

Indian demand likely to remain robust in January
Published: 23 January 2009

The Indian cement industry, which surprised the market with its high growth in sales in December at a time when market was anticipating lackluster demand, is likely to repeat the good show in January as well. Industry as well as the sector analysts said that so far demand has been good in the current month.

In December, the industry clocked a growth rate of 12.11 per cent (YoY) with a despatch figure of 16.01Mt against 14.28Mt. The growth rate till October was around 7-8 per cent. Industry statistics for January will be available from the Cement Manufacturers’ Association (CMA) by the first week of next month.

HM Bangur, president, CMA, said, “So far, the demand has been good this month. And I believe, more or less, the despatches growth rate will be equal to that of December’s.” Bangur is also the chairman and managing director of the north major Shree Cement.

If the despatches growth rate is over 10 per cent in the current month, it will be after a gap of three years when industry would see growth above 10 per cent in despatches. It was in January, 2006 when industry had registered a rise of 14.34 per cent in despatches.

The factors which are fuelling good growth are mainly personal home building and infrastructure projects. According to Bangur, real estate is still showing weak demand for cement. Sumit Banerjee, managing director of the country’s largest cement giant ACC had told Business Standard that the domestic market was witnessing the growth factor in the later part of the December quarter. ACC, which felt forced to shut one of its kilns of 2.5Mt capacity in Himachal Pradesh due to weak demand, has its presence across the country.