Cement surge runs out of steam?

Cement surge runs out of steam?
Published: 07 April 2004

After a strong surge in cement volumes since the beginning of the calendar year, the momentum seems to have slowed down with industry dispatches up by a modest five per cent in March 2004, as against a 10.8 per cent growth in the previous month. Industry dispatches last month increased to 11.3Mt, up from 10.7Mt in the corresponding period last year. For the full fiscal, the total dispatches increased just over six per cent to 117.1Mt, as against 111Mt in the previous year. Industry officials say that a slowdown in industry growth is largely due to low cement dispatches in Gujarat, which had witnessed a major demand revival in recent months.

Analysts however add that the modest growth in cement dispatches last month could also be linked to the clampdown by the Election Commission on small infrastructure projects on the eve of the general elections. "There has been a slowdown in infrastructure related projects like canals and small irrigation projects in states like Uttar Pradesh, Delhi, and Gujarat due to strictures from the election commission. This has had its impact on cement volumes last month," said an analyst. ACC’s cement dispatches last month rose eight per cent to 1.48Mt, up from 1.37Mt  a year ago. The Gujarat Ambuja group, comprising flagship Gujarat Ambuja Cements, Ambuja Cement Eastern and Ambuja Cement Rajasthan, however reported lower dispatches at 1.24Mt in March, as against 1.31Mt for the corresponding month last year, while Grasim Industries reported a three per cent growth in volumes. Industry officials say there is no concern on the dispatch front as demand has been strong. "We expect the demand situation to remain steady for the next few months, at least till the monsoon sets in," said an industry official to reporters at The Economic Times.