INDIA: Cement sales in India up in March

Cement dispatches by major manufacturers improved in March on the back of a strong pick up in demand across regions. 

Owing to the revival in demand, cement companies hiked prices by INR 10 to INR 25 per bag in March. The revision follows a similar hike in February due to the surge in input cost.

An analyst said that demand firmed up in March with many real estate companies putting some of their projects, which were close to completion, on fast-track to meet the financial year deadline. He added that the demand growth remains uncertain unless infrastructure activities gather steam. Infrastructure projects in five states Tamil Nadu, Kerala, Puducherry, Assam and West Bengal have come to a standstill after Assembly elections were announced.

A cement company official said that “Cement companies are betting on real estate projects, especially in rural areas, for demand to hold up in the coming months. “Besides the rising raw material cost, transportation and fuel expenses for cement companies have jumped sharply. If the demand continues to remain strong, we will not have a problem in passing on the increase in cost.”

Demand for cement grew 4.5% in April to December 2010 and capacity utilization was at 75%.

Larger players such as ACC, Ambuja Cements and UltraTech Cement have marginally outperformed the market whereas the mid-sized companies such as Shree Cement, JK Lakshmi Cement, JK Cement, India Cements, Madras Cement and Orient Paper & Industries continue to lag.