Cement on firm footing as housing demand soars, India

Cement on firm footing as housing demand soars, India
Published: 09 February 2005

The India cement sector has registered 11% surge in sales last month, thanks to robust housing demand across most markets.  

Industry sales shot up to 11.3Mt, up from 10.1Mt a year ago. Total cement production rose 11.3Mt, up from 10.2Mt YoY.

Industry officials say last month’s industry shipments - which have shown improvement over December’s sales of 10.8Mt - are the second highest reported in this fiscal.  

Industry sales were the highest in March last year at 11.3Mt. The sharp rise is particularly heartening for the industry, as it comes at a time when average prices are ruling strong in most regions.  

Average realisations for cement firms are almost 10% up YoY, and cement demand has been showing a marked improvement since November last year.  

Industry officials say that the spurt in demand has been particularly pronounced in the eastern, northern and western regions. Demand in the South, particularly in Tamil Nadu and Andhra Pradesh, has also been witnessing a strong revival.  

"Overall demand is very good. The South, which had been a laggard in earlier months, is also showing a marked improvement," said Gujarat Ambuja Cements’ executive director Anil Singhvi.  

During April-January ’04-05, industry dispatches, including exports, rose by 7.5% to 102.6m tonnes, up from 95.6m tonnes during the corresponding period of the last fiscal.  

The industry volumes had recorded a modest 5.5% rise in the previous fiscal. Industry observers say the current spurt in volumes is led by housing demand, with very little contribution from the infrastructure and road sectors.  

"There is hardly any contribution from the infrastructure sector. Exports are also doing well," a official said.