Cement demand in south up 22% in Q1

Cement demand in south up 22% in Q1
Published: 25 July 2005

After being in the dumps for long, the south is finally showing signs of a strong revival. Cement consumption in the southern region picked up momentum during the first quarter, growing by a breathtaking 22.2% year-on-year, which is almost double the industry average. 
Andhra Pradesh has come out on top in cement consumption, which grew by 33% to 2.4 lakh tonne. Tamil Nadu, Kerala and Karnataka recorded growth of 23%, 21% and 16.6%, respectively, for the first quarter. Total industry dispatches grew by 11.4% to 34.1m tonne (MT) during the three-month period. 
The bad news for cement manufacturers, however, is that cement prices in southern states have failed to move in tandem, as the supply overhang far outweighed the surge in consumption. Average prices in the region have underperformed, ruling far below other regions, where the monsoons did not have much of an adverse impact this time round. 
Industry observers feel that the price situation in the south could deteriorate further in the coming months, given that fresh capacities by local player Dalmia Cement aggregating 2Mt would come on-stream later this year. Besides, Chettinad 
Cements is also putting up a 0.5Mt grinding facility. N Srinivasan, vice-chairman and managing director of India Cements, the largest player in south India, says the demand situation is very strong in the south, primarily in Tamil Nadu and Andhra Pradesh. He added that cement prices were likely to shoot up post-monsoon.