Cement dealers in Mumbai continue to face shortage in supply of cement as producers seem to have shifted supplies for the infrastructure projects elsewhere in the country. Dealers now find it difficult to deliver the commodity for various residential and commercial projects within the metro on time.
A Mumbai-based dealer on condition of anonymity said, ?Our delivery period has gone up to about 7-8 days from 1-2 days earlier, due to this short supply.?
According to industry players, reasons for the short supply are insufficient railway rakes for transport and a sudden spurt in demand from the infrastructure sector.
ACC Ltd managing director Sumit Banerjee, had earlier told FE, ?According to our analysis, there are a large number of infrastructure and government projects where the budgetary allocation has to be spent by March 31 this year. With steel prices coming down and cement prices being stable, people may have thought that this is the right time to procure cement and steel to complete these projects.?
However, on the back drop of good demand, cement manufacturers, in the beginning of the current month, increased prices of cement by Rs 3-5 per bag in most parts of the country. Supply was short by about 15-20%, according to the dealers at the time of recent price hike; they expect the situation to continue.
According to the Cement Manufacturers Association (CMA) website, cement consumption in the western region (Maharashtra and Gujarat ) from April 2008 to Jan 2009 has gone up by 7% compared to the corresponding last year. However, cement production for the same period has dipped by 2%.
The overall despatches (including exports) for April 08 to Jan 09 in the country stood at 146.82 million tonnes against 136.48 million tonnes in the same period last year.
Meanwhile, cement despatches from the past consecutive three months have increased 11% year on year (yoy) in November 2008, 12% yoy growth in December 2008 and 8.26% yoy growth in January 2009.
The top four cement companies have reported good growth in despatches in the last month with ACC and Ambuja Cement posting 12.5% and 4.84% despatch growth respectively and Aditya Birla group showing 7.35% growth. JK Lakshmi also reported 22% growth in dispatches in January this year. ?The demand has been good in the month of January this year. Moreover, the current quarter is expected to have a good demand on the backdrop of infrastructure activity,? say industry players.