Government’s support and initiatives towards infrastructure projects and urban development are likely to drive the production and sales growth of the Indian cement industry in the current FY 2009-10.
According to industry’s projection, cement production of the world’s second largest producer, India, is estimated to reach 200 Million Tonnes, a 10% rise in 2009-10 fiscal, as per the news published by
The Economic Times.
As per the data provided by the Cement Manufacturer’s Association, cement production reached 181.61 Million Tonnes, a 7.9% increase in the last fiscal year.
Further, cement output in the first half of FY 2009-10 touched 96.73 Million Tonnes, 12% growth from 86.36 Million Tonnes in 2008-09, same period. On the other hand, cement consumption in the review period grew by 11.68%; from 84.86 Million Tonnes, it reached 94.77 Million Tonnes.
Moreover, installed production capacity of the industry during April-September period of the 2009-10 fiscal grew by 11.65 Million Tonnes. Of this, 7 Million Tonnes growth was from setting up new plant, and 4.65 Million Tonnes growth was through expansion.
On the back of the push given by the government to infrastructure development, the Indian cement industry is expecting higher production and sales growth in 2009-10 fiscal. Cement industry is enjoying strong support from the government’s initiatives related to urban development and various infrastructure projects. The industry has also lived up due to increased cement demand as a result of consistent growth of infrastructure and housing sectors.
It is to be noted that the country’s cement consumption has considerably hiked as the government has raided its budgetary allocation for under the National Highway Development Project (NHDP).
The aforementioned will support the industry in future. According to a
RNCOS market research report “
Indian Cement Industry Forecast to 2012”, country’s cement production is forecast to grow at nearly 11% CAGR between 2009-10 and 2011-12 to touch the figure of around 240 Million Metric Tonnes.
According to a Research Analyst at
RNCOS, “So far, the Indian cement companies have registered good numbers, with volume growth, good demand and plunge in production cost. However, in spite of reporting growth, upcoming new capacities have worried cement manufacturers, as they will influence the country’s already reduced cement prices. Along with the pressure on prices, new capacities entering the pipeline in the second half are expected to pressurize manufacture’s profit margins as well”.
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