Economy & Market

Core sector contracts by 38.1% in April 2020

Published

5 years ago

January 6, 2020

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The growth in coal production declined to a six-month low of 15.5 per cent in April 2020 compared with growth of 4 per cent in March 2020.

In view of the nationwide lockdown due to Covid-19 pandemic and the substantial production loss experienced by a number of industries, the core sector production in April 2020 contracted at its fastest pace in the last eight years. The production in the eight-core industries contracted by 38.1 per cent in April 2020 compared with 5.2 per cent in the corresponding month a year ago. All the eight industries of the core sector have experienced negative growth in April 2020. The contraction in March 2020 has been revised lower to 9 per cent from the earlier 6.5 per cent largely on account of downward revision in steel output. The de-growth of much sharper level was seen in July 2012 when the negative growth was 67.5 per cent. The core sector growth for FY20 has been consequently revised lower from 0.6 per cent to 0.4 per cent.

Highlights
The growth in coal production declined to a six-month low of 15.5 per cent in April 2020 compared with growth of 4 per cent in March 2020. Lower production can largely be attributed to lower power demand and build-up of inventories in the coal mines and power plants.

Production of crude oil continued to witness a contraction for 29th consecutive month. Crude oil production contracted by 6.4 per cent in April 2020 largely on account of closure of some oil wells and restriction in labour movements for field operations.

Natural gas and refineries both recorded double digit contraction of 19.9 per cent and 24.2 per cent respectively in April 2020. Steep decline in the fuel consumption in April 2020 and lower offtake of natural gas by consumers dragged production lower in April. The contraction in both has been the highest since the start of the 2011-12 series.

The contraction in cement and steel production was the sharpest and the fall was more than 80 per cent in both industries. Halt in production of user industries like auto and construction led to contraction in steel production. Nation-wide lockdown and reverse labour migration had an impact on construction activities owing to which production of both cement and steel declined. Both the industries recorded the steepest fall since the start of the new series.

Fertilizer production contracted by 4.5 per cent in April 2020 compared with 12 per cent recorded a month ago. Shortage in raw material availability and labour constraints owing to the pandemic impacted fertilizer production.

Electricity production also contracted at its fastest pace since the start of the new series at 22.8 per cent in April 2020 owing to the fall in electricity demand from commercial and industrial sector, which accounts for 50 per cent of the demand.

CARE Ratings’ View The nation-wide lockdown and the reverse labour migration have had an adverse impact on the production activity in the month of April 2020. The continuation of the lockdown in May 2020, albeit some relaxations means that the negative growth in core sector production will continue but could be marginally better than April 2020. One can expect a noteworthy decline in IIP growth for April 2020 given that core sector accounts for almost 40 per cent of the total IIP basket.

Courtesy: CARE Ratings

ABOUT THE AUTHORS: The article is authored by Sushant Hede, Associate Economist at CARE Ratings. He can be contacted at: sushant.hede@careratings.com | 91-22-68374348..

Disclaimer: This report is prepared by CARE Ratings Ltd. CARE Ratings has taken utmost care to ensure accuracy and objectivity while developing this report based on information available in public domain. However, neither the accuracy nor completeness of information contained in this report is guaranteed. CARE Ratings is not responsible for any errors or omissions in analysis/inferences/views or for results obtained from the use of information contained in this report and especially states that CARE Ratings has no financial liability whatsoever to the user of this report.

Concrete

15th Cement EXPO: A Step Forward in Cement Innovation

Published

3 weeks ago

January 17, 2025

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Mumbai

Following the immense success of the 14th Cement EXPO, held on December 14-15, 2023, at the Manekshaw Centre, New Delhi, the next edition of this premier event is set to take place in March 2025. The 15th Cement EXPO will be hosted at Yashobhoomi, Delhi, on 12th and 13th November 2025.

Meanwhile, the Cement Expo Forum 2025 is scheduled for 5th and 6th March 2025 at Taj Krishna in Hyderabad. This exciting 3-in-1 event, organised by FIRST Construction Council (FCC) and Indian Cement Review (ICR), will bring together industry leaders, innovators, and stakeholders to discuss the future of the cement sector.

Building on the Success of the 14th Cement EXPO

The 14th Cement EXPO was widely praised for its strong participation, attracting over 1,500 senior managers and decision-makers from across the cement industry. The event was inaugurated by Dr. Vibha Dhawan, Director General of TERI, and Ali Emir Adiguzel, Founder and Director of the World Cement Association, alongside Pratap Padode, Founder of FIRST Construction Council (FCC). The two-tiered exhibition space featured cutting-edge products and innovations from top companies within the cement industry’s supply chain.

The event also garnered significant support from key government bodies, including the Ministry of Road Transport and Highways, Government e-Marketplace (GeM), and the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India (GoI).

Recognition and Excellence in the Cement Industry

The 7th Indian Cement Review Awards celebrated excellence by presenting awards to 11 companies in various categories, recognising their contributions to growth and innovation within the industry. Notably, Parth Jindal, Managing Director of JSW Cement, was honoured with the prestigious Indian Cement Review – Person of the Year Award 2023. Meanwhile, Vinita Singhania, Vice Chairman and Managing Director of JK Lakshmi Cement Ltd, received the Lifetime Achievement Award for her outstanding leadership and contributions to the sector.

A Vision for Sustainability

With the theme of “Driving Sustainability Through Technology,” the 9th Indian Cement Review Conference hosted thought-provoking discussions and presentations, highlighting the industry’s commitment to adopting innovative, sustainable practices. The conference served as a platform for dialogue on the latest technological advancements aimed at transforming the cement sector, addressing key challenges, and fostering growth.

What to Expect from Cement EXPO 2025

The 15th Cement EXPO, along with the 10th Indian Cement Review Conference and the 8th Indian Cement Review Awards, is set to be even bigger and more impactful than the 2023 edition. With an expanded exhibition space, greater participation, and more in-depth discussions, the 2025 event will continue to drive the industry forward. This 3-in-1 event promises to be a pivotal moment in the ongoing transformation of the cement sector.

As the industry evolves, the 15th Cement EXPO 2025 will serve as a crucial platform for showcasing innovations, discussing emerging trends, and forging new partnerships to shape the future of cement and construction.

For more details:

Cement Expo Forum 2025: https://cementexpo.in/forum

15^th Cement Expo 2025: https://cementexpo.in/

FOR CONFERENCE SPONSORSHIPS

Sheetal Talreja

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Email: sheetal@IndianCementReview.com

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Concrete

Construction sector growth slows to 8-10% for FY2025: ICRA

Published

3 weeks ago

January 15, 2025

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The revenue growth for construction companies in FY2025 is projected at 8-10 per cent, down from the earlier estimate of 12-15 per cent, according to ICRA. This marks the slowest growth in three years, driven by factors such as the Model Code of Conduct in Q1, prolonged monsoons, and milestone-based billing in Q2, particularly affecting road-focused players.
ICRA’s analysis of 19 companies with a combined turnover of Rs.1.28 trillion in FY2024 shows modest revenue growth of 1.5 per cent YoY in H1 FY2025. While execution is expected to improve in H2, FY2025 growth remains below the historical CAGR of ~15 per cent (FY2018-FY2024).
Order inflows in urban transport, water and sewage projects are healthy, but road-focused entities face challenges due to muted inflows and high competition. Operating margins are projected to remain range-bound at 10.5-11 per cent, with debt levels rising to manage working capital needs, though debt coverage metrics remain stable.

Concrete

SANY India expands Pune factory to boost production capacity

Published

3 weeks ago

January 15, 2025

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SANY India inaugurated a cutting-edge factory expansion at its 90-acre Pune facility, elevating its production capacity to over 14,000 units annually, alongside a robust fabrication capacity of 100,000 metric tonnes.

The advanced facility reinforces SANY’s commitment to ‘Make in India’ by enhancing localised manufacturing and supporting global exports. Chairman Xiang Wenbo highlighted the strategic importance of India as a global hub, while Vice Chairman Deepak Garg emphasised the expansion’s role in driving innovation and infrastructure development. This investment enhances efficiency, reduces timelines, and strengthens SANY’s leadership in the construction equipment sector.