‘Cement demand to rise 7% this fiscal’

Our Corporate Bureau

Mumbai, Nov 20: Cement demand is expected to increase by nearly seven per cent during 2001-02, over that of the corresponding period last fiscal, with an increase in offtake in Karnataka, Gujarat, Andhra Pradesh and West Bengal.

Demand is also expected to grow by nearly 8.5 per cent during October-March 2001-02, as compared with the corresponding period in 2000-01, according to a CRIS Infac report.

The increase in demand may be attributed to normal monsoons during June-September, particularly in drought affected states of Rajasthan, Gujarat, Andhra Pradesh and Chhattisgarh, it said.
The study has observed that the growth in the sector is expected to be particularly strong from individual housing segment (urban and rural), agriculture, roads under the Centre’s ambitious Golden Quadrilateral project and from private corporate segment in certain states such as Karnataka.

In October-March period, profitability was expected to grow on account of a marginal increase in realisations (in west and north), higher volumes sold during the period and due to relatively stable operating costs.

According to the report, during April-September, cement prices increased across most centres in all regions (except in Chennai and parts of Tamil Nadu) as a result of increase in demand and strong supply management by major producers.

In October-March, prices are expected to further increase marginally in west and north by Rs 3-5 per bag, but may remain stagnant in east and decline in south, it said.

The increase in average price realisations in 2001-02 is expected to be significant in the western region (Gujarat and Maharashtra) where prices are estimated to increase by upto Rs 17-18 per bag, as compared with those in 2001-01.