Sri Lanka sales expected to pick up

Following a contraction in the first quarter of this year, cement demand in Sri Lanka is expected to pick up, according to forecasts by one of the country’s leading producers.

"During 2012, the momentum of residential housing construction slowed down, and in the first quarter of 2013, private tourism related constructions too, indicated signs of slower growth," managing director of Tokyo Cement, SR Gnanam, told shareholders in the annual report.

"Meanwhile, the SME contractor segment, that makes up the backbone of the domestic construction industry, experienced severe liquidity constraints.

Small scale contractor segment was adversely affected both by the rising cost of credit, the credit ceiling and cash flow delays, he added. “This situation reined-in construction growth momentum and dampened demand for cement, that would otherwise have been higher."

Last year, cement demand increased by 14.4 per cent t0 5.24Mt. Gnanam said a 10 per cent annual growth is expected in the medium term helped by state investments in infrastructure and also private investment.

Tokyo Cement runs neck-and-neck with Holcim Lanka for market share, with each satifsying about one-third of market demand. Tokyo Cement has 1.8Mta of grinding plant at Trincomalee Port and has a strong market position supported by its brand and dealer network.