In my view, the infrastructure sector in India is looking upward with major investment and expansions plans. India’s cement industry, which is a 224 million – tonne industry is set to grow at 10 per cent in June, thanks to spending on infrastructure and housing projects together with industrial expansion. Since November last year, the domestic cement sector has managed to keep its growth over 8 per cent on the back of good demand for the building material. It struck a growth of as high as 13 per cent in the beginning of the current financial year in April. The main factors which kept the momentum going in June as well was the delayed monsoon which gave additional time for construction activities and with the government back in power and pro reform mood kept the demand going up.
Now, with the construction and real estate sector is showing signs of recovery from the global recession, the cement industry is also picking pace. Cement companies have announced their numbers for the month of June, 2009.
For example, big cement companies sold 8.04 lakh tonnes in the month of June, which increased 29% on year-on-year basis. A 29 per cent increase in cement despatches at approximately 8,04,345 MT for June 2009 from 6,24,182 MT in June 2008. Another major’s sales went up 27.9% at 7,78,980 metric tonnes as against 6,09, 040 metric tonnes, (YoY). Another player sold 1.59 million tonnes while its output stood at 1.60 million tonnes. The shipments rose 8.2 per cent to 1.59 million tonnes during June 2009 compared to the year ago period. The third manufacturer’s sales increased to 1.81 million tonnes (MT versus 1.79 MT (YoY). A manufacturer’s Q1 cement production went up by 18.9% at 94.9 lakh metric tonnes and cement sales rose 19.5% at 94.9 lakh metric tonnes (YoY). The cement despatches rose 21.7 per cent to 3.14 million tonnes in June
The cement sector was surprised with better growth in demand, despite sluggishness in the real estate sector. The industry is taking advantage of the scenario and has been aggressively pursuing expansion (brown field & green field) and mergers for the past few quarters.