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Core sector output rose to 32-months high in March 2021

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The eight core sector output rose to 32-months high of 6.8 per cent in March 2021 chiefly on account of a negative base of -8.5 per cent in the corresponding month of the previous year. Therefore, one needs to read the core sector growth number with caution. The pick-up observed in March 2021 has been on account of significant double-digit growths witnessed in steel, cement, electricity and natural gas, where the production activity had seen a sharp decline in March 2020 on the back of the imposition of the nation-wide lockdown. The contraction witnessed in the month of February 2021 has been revised upwards to -3.8 per cent as against the previous estimate of 4.6 per cent.

For the full fiscal FY21, the core sector has contracted by 7 per cent compared with a subdued pace of 0.4 per cent in FY20. This is the first time in the last eight years when core sector output has declined. In 8 of out the 12 months during the fiscal, core sector output has seen a contraction, reflective of the adverse impact of the pandemic and the consequent lockdowns on the production activities of the 8-core sector. During the year, there has been a broad-based decline across almost all the sectors with the impact being sharp in refinery products, steel and cement sector. Fertiliser has been the only sector which has seen positive growth, which reflects unabated performance of the agriculture sector despite the lockdown while the impact on electricity production has been relatively lower as resumption of economic activities in the second half of the fiscal pushing up the growth number.

Key highlights:

  • Coal production recorded its sharpest contraction in the new series with the base year 2011-12. The de-growth of 21.7 per cent in March 2021 has come against a positive base of 3.7 per cent in March 2020 and it also reflects high level of coal inventories with coal producers. However, there has been a sequential improvement owing to healthy demand from the power steel and cement sector.

  • Crude oil production fell by 3.1 per cent in March 2021 compared with a decline of 5.5 per cent in March 2020 and this is the 40th consecutive month of negative growth for the sector. This decline can be ascribed to delays in installation of new platforms due to COVID-19 restrictions, localised lockdowns and lower planned contribution from work-over, drilling and old wells. Natural gas production rose sharply by 12.3 per cent in March 2021, its highest growth in the new series with the base year 2011-12. This is the first time the segment has recorded positive growth after 21 consecutive months of deceleration. The positive growth has been on account of a low base (-15 per cent in March 2020) coupled with production commencement of natural gas from one of the key players in the private sector.

  • Refinery production declined by 0.7 per cent in March 2021 compared with 0.5 per cent in March 2020, recording the 13th consecutive month of decline in production. Although there has been a sequential improvement, the fall can be ascribed to lower demand for petroleum products and annual maintenance and installation shutdown for some plants.

  • Fertiliser production continued to decline for the second consecutive month. The fall in production has been sharper in March 2021 by 5 per cent compared with 3.7 per cent in February 2021 but is better than 11.8 per cent decline in March 2020. The YoY decline is the sharpest in the last one year.

  • Steel (23 per cent), cement (32.5 per cent) and electricity (21.6 per cent) have registered positive growth of above 20 per cent during March 2021 and is primarily on account of a statistical base effect. However, year-end phenomenon of infrastructure projects being on track coupled with State governments and Central government expediting capex plans have provided the impetus and the same is reflected in the numbers. Sequentially too all three sectors have registered a notable pickup. In case of steel, producers ramped up production backed by higher export demand and realisations.

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The March, April and May 2021 growth numbers for core sector and industrial growth was expected to be high on the back of sharp declines registered last year. The core sector growth numbers for the next two months are likely to be elevated as the decline in April and May 2020 were sharper than March 2020. Hence, we must be cautious in reading the growth numbers for the next two months also as the theme of March 2021 is likely to carry forward. IIP growth for March 2021 is likely to be closer to double-digit mark given the decline of 16.7 per cent last year.

Courtesy: CARE Ratings

ABOUT THE AUTHOR:

The article is authored by Sushant Hedem who is Associate Economist with CARE Ratings. He can be contacted at: sushant.hede@careratings.com | +91-22-6837 4348.

Disclaimer: This report is prepared by CARE Ratings Limited. 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.

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Concrete

30-Day Traffic Diversion In Place For CC Road Works In Madhapur

Diversions in place from May 16 for cement concrete road works

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The Cyberabad Traffic Police issued a traffic advisory as road works begin for the laying of a cement concrete (CC) road from Jaya Shankar Statue to RRR Restaurant at Parvathnagar in Madhapur limits. The advisory indicated that traffic diversions will be in place for 30 days from May 16 to ensure the smooth flow of vehicles and to minimise congestion on the affected stretch. The measure aims to balance uninterrupted construction activity with the movement needs of commuters.

Traffic moving from Toddy Compound towards Parvathnagar village will be diverted at Parvathnagar junction towards Sunnam Cheruvu and the 100 feet road. Local motorists and public transport operators have been advised to follow the diversionary route as directed by traffic personnel on duty. Alternate routes and signage have been planned to mitigate delays and to manage peak hour congestion.

Police officials said the diversion had been planned to facilitate uninterrupted road works while maintaining traffic movement in the area. Commuters were urged to plan their travel accordingly and to cooperate with traffic staff managing the stretch. Authorities indicated that enforcement of diversions would be active and that violations could attract penalties.

The 30 day schedule is intended to allow contractors to complete the laying and curing phases with minimal interruption to vehicular flow. Residents and businesses in adjacent localities have been advised to factor the diversion into deliveries and travel plans. The traffic police promised continuous monitoring of the works and the operational diversions and emphasised that temporary inconvenience was necessary for longer term improvement of the road network. Traffic personnel will be stationed at key junctions and additional signage and temporary markings will be displayed to guide motorists and pedestrians through the revised alignments while public transport services will follow the diversion where feasible and operators have been asked to adjust timetables to minimise disruption.

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Concrete

HeidelbergCement India Receives Consent For Khandwa Grinding Unit

Consent granted by Madhya Pradesh Pollution Control Board

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HeidelbergCement India (HeidelbergCement India) has received regulatory consent to establish a cement blending and grinding unit at Village Dongaliya, Tehsil Punasa, District Khandwa in Madhya Pradesh. The consent was granted by the Madhya Pradesh Pollution Control Board under the Water (Prevention & Control of Pollution) Act, 1974 and the Air (Prevention & Control of Pollution) Act, 1981 and is dated 17 May 2026. The company disclosed the development in a filing made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The project plan envisages procurement of long term availability of fly ash and the allotment of land on lease for setting up the unit. The proposed facility is described as a blending and grinding installation which will process cementitious materials sourced from nearby operations and suppliers. Company filings state the measures required to secure raw material logistics and statutory compliance before commencing construction.

The addition of a grinding unit in Khandwa is intended to strengthen regional supply and improve logistical efficiency by reducing haulage distances for finished product. The unit is expected to complement existing capacities in central India and to offer flexibility in product mix through blending operations. The reliance on fly ash as a supplementary cementitious material will necessitate long term supply agreements with thermal power producers and coordination with waste utilisation policies.

The disclosure to the regulator and to the stock exchanges follows standard corporate governance practice and aims to keep investors apprised of capital expenditure initiatives. The company indicated that subsequent permits and clearances would be sought in accordance with applicable environmental and land use rules. The project is presented as part of HeidelbergCement India’s broader strategy to optimise capacity distribution and to respond to regional demand dynamics.

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Concrete

PROMECON introduces infrared-based tertiary air measurement system for cement kilns

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The new solution promisescontinuous, real-time tertiary air flow measurement in cement plant operations.

PROMECON GmbH has launched the McON IR Compact, an infrared-based measuring system designed to deliver continuous, real-time tertiary air flow measurement in cement plant operations. The system addresses the longstanding process control challenge of accurate tertiary air monitoring under extreme kiln conditions. It uses patented infrared time-of-flight measurement technology that operates without calibration or maintenance intervention.

Precise tertiary air measurement is a critical requirement for stable rotary kiln operation. The McON IR Compact is engineered to function reliably at temperatures up to 1,200°C and in the presence of abrasive clinker dust. Its vector-based digital measurement architecture ensures that readings remain unaffected by swirl, dust deposits or drift. Due to these conditions conventional measurement systems in pyroprocess environments are often compromised.

The system is fully non-intrusive and requires no K-factors, recalibration or periodic readjustment, enabling years of uninterrupted operation. This design directly supports plant availability and reduces the maintenance overhead typically associated with process instrumentation in high-temperature zones.

PROMECON has deployed the McON IR Compact at multiple cement facilities, including Warta Cement in Poland. Plant operators report that the system has aided in identifying blockages, optimising purging cycles for gas burners, and supplying accurate flow data for AI-based process optimisation programmes. The practical outcomes include more stable kiln operation, improved process control, and earlier detection of process disturbances.

On the energy side, real-time tertiary air data enables reduction in induced draft fan load and helps flatten process oscillations across the pyroprocess. This translates to lower fuel and energy consumption, fewer unplanned shutdowns, and a measurable reduction in NOx peaks. This directly reflects on the downstream cost implications for plants operating SCR or SNCR systems for emissions compliance.

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