Economy & Market

Core sectors contract by 15% in June 2020

Published

7 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

Concrete

Fornnax Wins AIRIA’s Special Export Award for Rubber Machinery in 2025-26

Published

17 hours ago

October 19, 2026

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Fornnax Technology Pvt. Ltd. has been honoured with the Special Export Award – Rubber Machinery for 2025–26 by the All-India Rubber Industries Association (AIRIA), in recognition of its highest exports of tyre recycling plants to the European region.

With more than a decade of experience in India’s tyre recycling industry, Fornnax has contributed to the development of advanced recycling technologies and infrastructure. The company currently holds a 90% market share in India’s domestic tyre recycling sector, while exports account for 30% of its business, spanning markets such as Europe, Australia and the GCC.

The award marks another milestone for Fornnax, whose tyre recycling lines and advanced shredding technologies are supporting the growth of the circular economy in India and international markets.

Commenting on the recognition, Mr. Jignesh Kundaria, Founder and Director of Fornnax, said:

“This honour from AIRIA is a reflection of an incredible journey we have undertaken over the years. When we started Fornnax, there was no established recycling industry in India to follow. We chose to build for the future instead. Today, when you see India’s tyre recycling sector, it has already transformed into a dynamic, high-growth industry and we are extremely proud to have played our part in building it.”

Unlike standalone equipment suppliers, Fornnax focuses on developing complete, high-capacity recycling infrastructure. Its integrated systems combine multiple stages of shredding and size reduction to enable efficient, continuous operations. This system-level engineering approach helps recycling operators improve throughput, equipment reliability and operational consistency.

The recognition reinforces Fornnax’s commitment to developing engineering technologies that contribute to a more efficient and circular recycling ecosystem.

Looking ahead, the company aims to expand its international presence while continuing to develop advanced shredding and recycling solutions to address the growing volumes and evolving requirements of the global recycling industry.

For more information, visit: www.fornnax.com

Concrete

Wonder Cement appoints Mahesh Singh as VP Corporate Brand Communication

Published

2 weeks ago

October 9, 2026

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Singh brings 20+ years of brand and marketing experience, and will lead integrated corporate brand communication initiatives at Wonder Cement

New Delhi

Wonder Cement, a leading cement manufacturer, has appointed Mahesh Singh as Vice President – Corporate Brand Communication. In his new role, he will oversee corporate brand strategy and communication, including digital and performance marketing, public relations, trade, events, exhibitions, sports and experiential marketing.

Singh brings over two decades of experience across marketing and communications, with roles spanning the automotive industry, agencies and entrepreneurship. He spent more than a decade with Honda Motorcycle & Scooter India, working across integrated communication, media, digital, retail and consumer engagement. His stint also included helping build the company’s digital marketing capabilities.

He moved to dentsu X India as Vice President – Strategy & Planning, working across categories such as automotive, auto components, electric vehicles, FMCG, consumer electronics, BFSI, apparel and brand consulting. His responsibilities included media and marketing strategy, product launches, content, performance marketing and consumer activations.

Singh subsequently took an entrepreneurial route with Radiant Brands before joining Shriram Ltd (SPR Autotech) as Head – Marketing & Communications. There, his remit included brand and corporate strategy, communications, PR and ORM, retail identity, loyalty programmes and events.

At Wonder Cement, Singh will be responsible for bringing together the company’s corporate brand communication initiatives across digital, performance marketing, PR, trade, sports and experiential platforms. The role will focus on creating an integrated approach to communication across consumers, trade partners and other key stakeholders.

The appointment brings to Wonder Cement a marketer whose career has spanned the brand, agency and entrepreneurial sides of the communications ecosystem.

Wonder Cement, part of the RK Group, is a cement manufacturer with roots in Rajasthan and a focus on quality, trust and transparency. The company has grown to six manufacturing plants, and a cement capacity of 21.5 MTPA. With more than 2,000 employees and a network of over 5,000 dealers, its operations span manufacturing, distribution and customer engagement, with a focus on consistent product quality and efficient execution.

Concrete

JSW Cement commissions additional 1 MTPA grinding unit at Nagaur

Published

2 weeks ago

October 8, 2026

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With this commissioning, JSW Cement’s total cement grinding capacity has increased to 25.10 MTPA,
Mumbai

JSW Cement, one of India’s leading green cement producers and part of the diversified JSW Group, today announced the successful commissioning of an additional 1.00 MTPA cement grinding unit at Nagaur, Rajasthan. The commissioning marks another significant milestone in the Company’s growth strategy.

With this commissioning, JSW Cement’s total cement grinding capacity has increased to 25.10 MTPA, while its total clinker manufacturing capacity, including clinker capacity at its joint venture, JSW Cement FZC, stands at 9.74 MTPA.

JSW Cement had commenced operations in North India in March 2026 with the Nagaur Integrated Plant, comprising a 3.30 MTPA clinkerisation unit and 2.50 MTPA cement grinding unit. With the commissioning of the additional 1.00 MTPA cement grinding unit, the plant’s total cement grinding capacity has increased to 3.50 MTPA, enhancing the company’s ability to cater to the growing cement demand across Rajasthan, Haryana, Punjab and the National Capital Region (NCR). The expansion has been funded through a strategic mix of equity and long-term debt.

During the quarter ended 30th September 2026, JSW Cement has also commissioned the Alternate Fuel Handling System and the Waste Heat Recovery system (WHRS) at the Nagaur Integrated Plant.

Nilesh Narwekar, CEO, JSW Cement, said: “The commissioning of additional 1.00 MTPA grinding capacity at Nagaur is a key strategic priority for us and will accelerate JSW Cement’s expansion into North India. We look forward to servicing the growing needs of the region and contributing to the economic growth of Rajasthan, Haryana, Punjab and the NCR area. I am delighted to share that the company has commissioned this grinding unit within the expected timeline, showcasing our project execution capabilities. Further, the Alternate Fuel Handling System and the Waste Heat Recovery system (WHRS) are expected to substantially reduce our production costs going forward.”