The Hindu Business Line : Weak demand pulls down cement sales in Sept

Holcim-owned Ambuja Cement’s despatches were down 5 per cent to 1.36 million tonnes (mt) from 1.43 mt in the same period last year. Output fell by three per cent to 1.38 mt (1.42 mt).

ACC sales dipped 1 per cent to 1.63 mt (1.65 mt) mainly due to drop in demand in the southern markets. Production, however, rose marginally to 1.64 mt (1.63 mt).

Aditya Birla Group companies, UltraTech Cement and Grasim Industries, reported a 4 per cent fall in sales at 2.77 mt against 2.90 mt in August. Production plunged 6 per cent to 2.74 (2.93 mt).

Shree Cement, one of the largest manufacturers in the north and among the country’s top five, saw its sales to 6,80,170 tonnes (6,89,000 tonnes). JK Lakshmi Cement’s sales were down 2 per cent to 3,11,000 tonnes (3,16,000 tonnes).

Cement sales in August were down 3 per cent to 15.44 mt from 15.95 mt in July. Production fell 4 per cent to 15.52 mt (16.23 mt).

“Cement demand has remained weak throughout September. Prices have fallen by Rs 5 to 8 a 50 kg bag. With the demand from real estate sector not picking up to commensurate with capacity being added by the industry, prices are expected to fall further in the coming months,” said an analyst.

A drop of Rs 5 has bought retail prices to Rs 260 a bag in Mumbai, Gujarat and the southern markets and to about Rs 252 (a bag) in the north and east. An estimated 75 mt of capacity is expected to come on stream between FY’10 and FY’11. The capacity addition comes on the back of about 29 million tonnes added last year. A major portion of the build up is happening in the south and west, he said.

Shares of cement companies saw a mixed trend on the BSE. While ACC and Shree Cement shares fell 0.79 per cent and 0.25 per cent to Rs 826 and Rs 1,643, Ambuja Cement and JK Lakshmi Cement gained 2.76 per cent and 2.35 per cent to Rs 102 and Rs 144 on Thursday.

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