With the last quarter (Jan?Mar ?09) witnessing good demand for the steel and cement sectors on the back drop of pre-election spending on infrastructure and rural demand, cement and steel players are betting on infrastructure spends by the new government in FY10 that would increase the demand for the commodities in the country.
Players believe that infrastructure development would entail building of modern ports, new super express highways, concretisation of roads, emphasis on canal lining etc. These would help the cement industry to cope with the oversupply which is likely to occur in the second half of FY10.
?The cement Industry, which is in the process of increasing its capacity by nearly 50% in three years, is today better equipped than at any other time to respond to the new requirements of these developments,? said Vinita Singhania, vice-president, CMA and MD of JK Lakshmi cement.
DD Rathi, wholetime director and CFO of Grasim, while announcing the company?s Q4 results had said, ?We have a lot of expectations that the government will auspiciously spend on infrastructure, which is the key to economic growth and hike in people?s earnings along with generation of employment. Infrastructure has been the need of the hour for India to keep pace and emerge as the fastest developing nation in the world.?
Similarly, with correction of about 60% in the global steel prices owing to economic slowdown, Indian steel players are now completely focusing on growing the domestic sales, and are expecting a lot of attention on infrastructure spending.
Says J Mehra, CEO, Essar Steel Business Group, ?There should be a lot of attention on capital outlay for infrastructure and the government should also make policies that promote exports.?
Globally, steel demand is expected to dip by 15%. However, steel demand in India is expected to grow, with the World Steel Association predicting that only India will be in a positive growth zone in 2009 at 2%. Industry players also expressed concern that the world is going through recession so India should continuously monitor products from certain countries are not brought into our country and sold at lower price.