Cement sales likely to rise by 12% in March

Mumbai:

Sales of cement is likely to go up by 12% in March on demand from real estate and construction sectors , say industry executives and analysts. This would be the third consecutive growth in sales of the building material in a month.

Cement companies are scheduled to announce sales data on March 31.

 “There are no dampeners to growth,” said Shree Cement managing director Hari Mohan Bangur. “Demand is robust and the industry will see healthy growth in March. The growth momentum will continue as there are no dampening factors.”

The growing sales are reflective of a robust demand scenario and Indian companies are expanding capacities. India’s cement industry is targeted to go up to 300 million tonnes by December, from the current 240 million tonnes. Globally, India is the second-largest cement maker after China.
In January, all India cement sales were up 11%,while it grew 4.3% in February.

Large cement majors - Aditya Birla, Jaiprakash Associates, Dalmia, JK Lakshmi and Shree Cements, are expected to grow mainly due to higher consumption by the building industry. These five companies together account for almost half of Indias total capacity of 240 million tonnes.

“Our initial estimates show that March sales would be higher compared to the first two months of the current year,” said Rupesh Sankhe,a cement analyst with Angel Securities. Sales could go up by 12% in March.

On Tuesday, Prime Minister Manmohan Singh said the country needs to spend $1 trillion on roads, ports, power and other infrastructure between 2012 and 2017.

“A sharp sales increase likely in March would be due to inventory pile up of February month. There was a shortage of wagons last month when many companies unable to deliver the commodity to the retailers,” Mr Sankhe added.

Apart from a revival in real estate, sectoral analysts say sharp pick up in the consumption of the key building commodity, following the government’s thrust on infrastructure spending.

“Sales have increased and company expects a 15% jump in revenues in the current quarter due to the boom in infrastructure and real estate projects in Kolkata,” said Ashok Gutgutia,managing director of Burnpur Cement.

With the boost given by the government to various infrastructure projects,road networks and housing facilities, growth in cement consumption has been anticipated.

Ajit Motwani, cement analyst, Emkay Global says that demand will rise over the next one quarter as most firms are expanding current projects aggressively, due to increased construction activities from the Commonwealth Games, which is scheduled to be hosted in Delhi. Source: MagciBricks