India’s July cement production increased, due to capacity additions by a few domestic cement manufacturers and as last year’s volumes for the month of July were low.
"It’s just the low base effect for some cement majors," said Rakesh Arora, associate director of Macquarie Securities, explaining the year-on-year rise in production.
Also, most cement manufacturers have been operating at about 100 per cent capacity, analysts said.
"The increase in production is due to units added by some of the cement companies," said Sneha Rungta, a research analyst at Religare Securities. He said ACC Ltd had set up a unit at Lakheri in the western Indian state of Rajasthan and Ambuja Cements Ltd commissioned its cement grinding unit at Farakka in West Bengal in the past year.
Rungta attributed the rise in cement despatch in the month to the construction activity picking up in southern and northern India.
ACC said its cement production for July rose to 1.63Mt from 1.47Mt in the same month last year, while its dispatches increased to 1.64Mt from 1.43Mt.
Ambuja Cements said its cement production for July rose to 1.40Mt from 1.18Mt in July 2006, and its cement despatches increased to 1.39Mt from 1.16Mt.
The Aditya Birla Group’s cement production for July rose by 9.13 per cent to 2.39Mt, while dispatches moved up by 13.10 per cent to 2.40Mt.