East leads in regional cement consumption with 16% growth

Mumbai, March 28 | Updated: Mar 29 2005, 05:47am hrs
Eastern India leads the growth in regional cement consumption for the period April 2004 to February 2005, registering a 15.6% year-on-year (Y-o-Y) increase to 181 lakh tonne. Delhi also clocked a 13% growth to 34 lakh tonne, even as the whole of the northern region managed a growth of only 6.2% to 219 lakh tonne, according to Cement Manufacturers Association (CMA).

Industry observers opine that by and large, over the past 10 years, the northern and eastern markets have been growing fast. At the same time, it was pointed out that the growth in eastern markets this time, could be on a small base 2% Y-o-Y growth in the previous period. Moreover, Bihar for instance, which saw a degrowth in the previous period grew by over 15% this time.

ACC executive director-marketing AK Jain told FE, The elections in Bihar and Jharkhand could have triggered additional developmental work in those states. ACC has a pan-Indian presence in cement. Gujarat posted a growth of 10.1% to 81 lakh tonne, while its neighbour Maharashtra, posted a 7% growth, in line with the national average.

A cement analyst with a leading Mumbai-based brokerage firm pointed out, Gujarat has been the fastest growing state in the country over the past few years. Moreover, it was plagued by natural calamities like earthquakes and floods in the recent past, which required reconstruction. He added that the growth in Delhi was on account of many construction projects currently underway and may slowdown a bit after that. Mr Jain attributed the growth in the Delhi market to construction activities like metro railway and expects the trend to continue.

Interestingly, the southern market, which saw a heavy degrowth of about 10% in the first two quarters of 2004-05, has improved in the latter half, according to industry sources. Thus, for April-February 2005 period, the region posted a meagre 1.2% degrowth. The improvement is expected to continue in the future.