Economy & Market

Core sectors contract by 15% in June 2020

Published

4 years ago

January 8, 2020

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During the first quarter of FY21, core sectors contracted by 24.7 per cent compared with 3.4 per cent growth recorded in the corresponding quarter last year.

Core sectors’ growth for June 2020 contracted by 15 per cent, better than the negative growth of 22 per cent recorded in May 2020. The improvement in negative growth in June reflects the relaxation of lockdown commencing from June 1. The core sector growth in June 2019 was also poor at 1.2 per cent. In the month of June 2020, barring fertilizers, all other industries have recorded a de-growth (yoy per cent).

During the first quarter of FY21, core sectors contracted by 24.7 per cent compared with 3.4 per cent growth recorded in the corresponding quarter last year. The contraction in core sector growth during the quarter reflects the impact of the nation-wide lockdown due to Covid-19 pandemic and the substantial production loss experienced by a number of industries.

Highlights for June:
Coal production growth contracted to 8-month low of 15.5 per cent in June 2020 compared with 2.9 per cent growth recorded in June 2019. This is mainly due to low off take of coal by power plants, high inventory pile up and low demand from user industries due to slow pick up in commercial and industrial activities. The negative growth (YoY) in June has been much steeper than May.
Production of crude oil continues to witness a contraction for 31th consecutive month. Crude oil production contracted by 6 per cent in June 2020 compared with 6.8 per cent in June 2019 owing to closure of wells due to lower off-take and restriction in movement or field operations.
Natural gas production recorded a negative growth of 12 per cent in June 2020, which is the 15th consecutive month of contraction. This can be ascribed to restricted gas off-take by consumers in onshore.
Refineries, which recorded a contraction for the 5th consecutive month saw production fall by 8.9 per cent in June 2020 owing to sub-par level capacity utilisation (85 per cent in June 2020 vs 99 per cent in June 2019).
The contraction in steel production is the highest amongst the 8-core industries at 33.8 per cent in June 2020 as against a growth of 10.8 per cent in June 2019 and can be attributed to subdued construction activities. However, there has been a notable improvement since April and May on account of large integrated steel players increasing production for exports.
Cement production contracted by 6.9 per cent in June 2020 compared with negative growth of 1.9 per cent last year. However, the degrowth has notably improved in June than April-May owing to easing of lockdown and pick-up in rural demand for cement. Cement players are still operating at sub-par levels and the onset of monsoon has also impacted production.
Fertilizer production has recorded a positive growth of 4.2 per cent in June 2020 compared with 1.6 per cent last year. This can be ascribed to higher demand at the onset of kharif season and increased operational activities due to relaxation of lockdown.
Electricity production, which recorded negative growth for 4th consecutive month, witnessed a contraction of 11 per cent in June 2020 as against a growth of 8.6 per cent last year. The contraction in June has eased from the previous two months as the pace of contraction of electricity production moderated with the improvement in electricity demand with the easing of the lockdown and resumption of economic activity in various regions.

Quarterly snapshot:
The impact of a nation-wide lockdown in April 2020 and its continuation in May and June 2020, albeit some relaxations reflects the negative growth seen in the core sector production numbers. Barring fertilizers, all sectors have recorded a steep contraction in Q1-FY21 compared with Q1-FY20.
Steel and cement industries recorded a sharp contraction of more than 30 per cent during the first quarter of FY21 owing to lower construction activities and reverse migration. Other industries like coal, natural gas, refinery and electricity have recorded a contraction of little more than 15 per cent.
The positive growth in fertilizers in Q1-FY21 can be ascribed to sharp increase in urea production and favorable monsoon forecast.
Crude oil production continues to witness contraction owing to ageing of existing fields and muted response from the industry to take up new projects.

CARE Ratings’ view
Further relaxations of nation-wide lockdown in July could further improve the production activity and reduce the negative growth recorded in the 8-core sector. However, the surge in coronavirus cases leading to localized lockdown at the state level could weigh on production activity. IIP growth for June 2020 will continue to be negative but is likely to be better than April and May 2020. It could be in the range of -20-22 per cent for June 2020.

Courtesy: Core Sector: June 2020 by CARE Ratings

Footnote:
ABOUT THE AUTHOR:
Sushant Hede, Associate Economist
Email: sushant.hede@careratings.com | Tel: 91-22-68374348

Madan Sabnavis, Chief Economist
Email: madan.sabnavis@careratings.com | Tel: 91-22-68374433

Economy & Market

RAHSTA to showcase cutting-edge road construction tech, says NCC Director

Published

1 week ago

April 19, 2024

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14th RAHSTA (Roads and Highways Sustainable Technologies & Advancement) Expo – India’s biggest road exhibition – will be held as a part 10th India Construction Festival 2024 at Jio Convention Centre, Mumbai, from October 9-10, 2024.

April 10, 2024, Delhi

“The RAHSTA expo will offer extensive information about the latest technology and methods for constructing high-quality roads. Currently, the challenge facing the roads industry is to uphold road quality and execute projects efficiently. RAHSTA will provide opportunities for everyone to learn about the latest worldwide technologies and equipment available, undoubtedly offering valuable insights to those involved in the roads sector,” said Vinod Kumar Yadav, Director – Transport, NCC, and former Chairman, Railway Board, while speaking during the launch of a road show – 14th RAHSTA Expo, which will be held from October 9-10, 2024, at Jio Convention Centre, Mumbai.

RAHSTA, which stands for Roads and Highways Sustainable Technologies & Advancement, is a dedicated event to the world of road construction equipment, technology, and sustainability.

“The Ministry of Road Transport & Highways has constructed 12,349 km of national highways in 2023-24 – the second highest achievement! In 2020-21 a record 13,327 kms had been constructed, the highest so far. The experience of a well-constructed road is no accident but a badly constructed one can cause many,” stated Pratap Padode, Founder, FIRST Construction Council, a pioneering infrastructure-driven council focused on advancing India’s infrastructure development.

Also speaking at the launch, former Managing Director of Ashok Leyland & JCB, Vipin Sondhi, also Chairman of RAHSTA Expo Committee underscored the need for specialised platforms like RAHSTA Expo for the burgeoning road construction industry.

Ashish Kumar Singh, CGM – Finance, National Highway Authority of India; RK Pandey, former NHAI member and Member of RAHSTA Expo Committee; SK Nirmal, Secretary General, Indian Roads Congress and Member of RAHSTA Expo Committee; Prof Satish Pandey, Principal Scientist, CSIR-Central Road Research Institute, Ministry of Science and Technology; Ankit Jain, CFO, Cube Highways Growth Advisors, Vijay Agrawal, Executive Director, Equirus Capital; and Subodh Dixit, Former Executive Director, Shapoorji Pallonji, participated in a round table discussion on the new BOT proposals.

The launch function at PHD Chamber for RAHSTA Expo was attended by who’s who of the infrastructure industry such Lt Gen Harpal Singh, President, International Road Federation and former Engineer-in-Chief, Indian Army; Akhilesh Srivastava, Road Safety Ambassador, International Road Federation; Sandeep Singh, Managing Director, Tata Hitachi Construction Machinery; Rajesh Menon, Director General, Society of Indian Automobile Manufacturers; Raman Kapil, President, Tata Projects; Anand Sundaresan, Director, Ammann India; Dheeraj Panda, Managing Director, Ammann India; Rajan Aiyer, Managing Director, Trimble; Satin Sachdeva, Founder & Secretary General, Construction Equipment Rental Association; Dr Swamy, Chairman, The Institution of Civil Engineers and Dr Ranjeet Mehta, Executive Director of PHDCCI, among others.

Organised by the FIRST Construction Council, the RAHSTA Expo 2024, which will be held as part of 10th India Construction Festival, will bring together industry leaders, innovators, and stakeholders for two days of exploration, collaboration, and transformation.

Besides RAHSTA Expo 2024, the India Construction Festival 2024 will include the following:

Exhibitors can use RAHSTA Expo 2024 to showcase their construction machinery, building material machines, mining machines, and construction vehicles to a targeted audience of industry professionals. RAHSTA Expo will be an ideal platform to connect with key decision-makers, generate leads, and grow business in this rapidly expanding market.

Contact:

For exhibitor enquiries (for RAHSTA Expo), contact Mr Sujoy on Mob: +91 86577 95881, or Email: sujoy.g@asappinfoglobal.com

For delegate enquiries (for conferences), contact Mr Amar on Mob: +91 86524 93000, or Email: delegate1@asappinfoglobal.com

Economy & Market

RAHSTA will drive road construction innovation: Sundaresan

Published

1 week ago

April 18, 2024

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April 10, 2024, Delhi

“We believe RAHSTA is the ideal platform for our presence, and we are confident in our participation in the upcoming expo scheduled for October,” said Anand Sundaresan, Director, Ammann India, while speaking during the launch of a road show – 14th RAHSTA Expo, which will be held from October 9-10, 2024, at Jio Convention Centre, Mumbai. RAHSTA, which stands for Roads and Highways Sustainable Technologies & Advancement, is a dedicated event to the world of road construction equipment, technology, and sustainability.

Sundaresan added, “We predominantly specialise in road construction machinery, such as asphalt plants, concrete batching plants, pavers, and rollers, among others. Additionally, we offer ancillary equipment like supers. With the government placing significant emphasis on infrastructure development, there is a substantial demand for road construction machinery. Particularly noteworthy is the growth witnessed in the last year (2023-2024), with a surge in orders. Moreover, the construction of airports is underway, necessitating equipment for runway construction. We perceive immense potential and opportunity for growth within the industry.”

“The Ministry of Road Transport & Highways has constructed 12,349 km of national highways in 2023-24 – the second highest achievement! In 2020-21 a record 13,327 kms had been constructed, the highest so far. The experience of a well-constructed road is no accident but a badly constructed one can cause many,” stated Pratap Padode, Founder, FIRST Construction Council, a pioneering infrastructure-driven council focused on advancing India’s infrastructure development.

Padode was speaking at the launch of a road show – 14th RAHSTA Expo, which will be held from October 9-10, 2024, at Jio Convention Centre, Mumbai. RAHSTA, which stands for Roads and Highways Sustainable Technologies & Advancement, is a dedicated event to the world of road construction equipment, technology, and sustainability.

Speaking at the launch, former Managing Director of Ashok Leyland & JCB, Vipin Sondhi, also Chairman of RAHSTA Expo Committee underscored the need for specialised platforms like RAHSTA Expo for the burgeoning road construction industry.

Ashish Kumar Singh, CGM – Finance, National Highway Authority of India; RK Pandey, former NHAI member and Member of RAHSTA Expo Committee; SK Nirmal, Secretary General, Indian Roads Congress and Member of RAHSTA Expo Committee; Prof Satish Pandey, Principal Scientist, CSIR-Central Road Research Institute, Ministry of Science and Technology; Ankit Jain, CFO, Cube Highways Growth Advisors, Vijay Agrawal, Executive Director, Equirus Capital; and Subodh Dixit, Former Executive Director, Shapoorji Pallonji, participated in a round table discussion on the new BOT proposals.

The launch function at PHD Chamber for RAHSTA Expo was attended by who’s who of the infrastructure industry such Lt Gen Harpal Singh, President, International Road Federation and former Engineer-in-Chief, Indian Army; Akhilesh Srivastava, Road Safety Ambassador, International Road Federation; Sandeep Singh, Managing Director, Tata Hitachi Construction Machinery; Rajesh Menon, Director General, Society of Indian Automobile Manufacturers; Raman Kapil, President, Tata Projects; Anand Sundaresan, Director, Ammann India; Dheeraj Panda, Managing Director, Ammann India; Rajan Aiyer, Managing Director, Trimble; Satin Sachdeva, Founder & Secretary General, Construction Equipment Rental Association; Dr Swamy, Chairman, The Institution of Civil Engineers and Dr Ranjeet Mehta, Executive Director of PHDCCI, among others.

Besides RAHSTA Expo 2024, the India Construction Festival 2024 will include the following:

Contact:

For exhibitor enquiries (for RAHSTA Expo), contact Mr Sujoy on Mob: +91 86577 95881, or Email: sujoy.g@asappinfoglobal.com

For delegate enquiries (for conferences), contact Mr Amar on Mob: +91 86524 93000, or Email: delegate1@asappinfoglobal.com

Concrete

New appointment at TMEIC

Published

1 week ago

April 17, 2024

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TMEIC Industrial Systems India, a Group company of TMEIC Corporation, Japan, has announced the appointment of Hidekazu Matsushima as the new Managing Director. Matsushima has been associated with Mitsubishi Electric FA division for domestic market in Japan since 1991 and been assigned in Industrial division in 1994, where he rolled out his mission of sales, marketing and business development of General industry (GI) such as paper, film, Oil & Gas, petrochemical, cement, food, automobile, semiconductor industries in Japan. During the establishment of TMEIC in Japan in 2003, he was assigned with the responsibility for domestic GI market Sales in Japan HQ, and then in plant and energy sales department.