Cement demand rises rapidly in October

Cement demand rises rapidly in October
Published: 25 November 2004

With Gujarat witnessing a fierce tussle for market share among  cement manufacturers, cement consumption in the state has received a major boost.  Even as cement prices have tanked heavily in recent weeks, consumption has shot up 65% year-on-year to 800,000t in October ’04. Despatches grew 28% over the previous month. Industry observers say the sharp rise in  volumes in the state is in no way a commentary on demand, but an indication  of the intense rivalry among manufacturers.

Sources said that Sanghi Cement has more than doubled its market share,  selling 160,000t. In fact, the company has reduced its clinker exports, by around 60% last month to step up its  local cement output. Consequently, its market share has grown from 9.7% to around  20%.

While Gujarat Ambuja Cements and the Aditya Birla group-controlled UltraTech  Cement are holding on to their market share - they have 22% each and both  have sold around 170,000t last month. Sanghi Cement is learnt to
have eaten into the markets of Rajasthan-based players, Laxmi Cement, Binani  Cement and JK Cement, which had a combined market share of around 15 per cent in the state.

Gujarat Ambuja’s cement despatches (170,000t) in the state last  month, excluding exports, are the highest in the current financial year.  Sanghi Cement, meanwhile, is learnt to be working towards hiking its cement  sales in the state to 200,000t in the current month to become the  market leader.

Interestingly, the fight for market share comes at a time when it is more  profitable for manufacturers to export - prices are firm in the global  market - than sell locally. Cement prices in Gujarat have declined sharply to around Rs110 per bag, as against Rs140 in early October.  But none of the manufacturers is quite ready to give up market share on  their home turf. Manufacturers say the price situation is expected to improve  by early next month, as this is the peak season for construction activity.