Cement industry expects to grow 8-9%

Cement industry expects to grow 8-9%
Published: 06 January 2005

With the continued focus on infrastructure development and a boom in construction witnessed in many parts of the country, the New Year is expected to see an increase in demand for cement. AK Jain, executive director - marketing, ACC, told FE: "We expect an 8-9% growth for the industry during 2005. Prices will continue to firm up across the country." Gujarat Ambuja (GACL) director, AL Kapur foresees a fairly balanced supply-demand scenario and expects an 8% demand growth this calendar year. Mr Jain said that cement prices will particularly see an uptrend in the northern, central and southern markets. More demand is expected from the southern region as well. VM Mohan, vice-president corporate finance of south-based India Cements, opined: "Both, calander year 2005 and fiscal 2005-06 would be an excellant year for the cement industry for several reasons. First, demand is increasing at a pace faster than supply. This will narrow the gap between the two. 

 With no major capacity addition in pipeline, demand would almost equal supply in most areas." Mr Jain feels that with every passing year, the demand-supply gap is narrowing down. Only the southern market still has a supply overhang. Some cement analysts are of the opinion that in northern markets, demand and supply will be balanced, while in eastern region the gap is closing in. Mr Mohan pointed out that an independent agency has estimated the country’s requirement of fresh capacity to the tune of 40-50 million tonne in 4-5 years. So far, only 10 million capacity is in the pipeline. "It is not easy to build such capacity immediately due to long gestation projects. With $100 million per tonne of capacity, we are talking about $4 billion (roughly Rs 15,000-20,000 crore), a substantial amount to raise," he said. (Abstracted from the Financial Express).