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Core sectors output remain negative

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In December 2020, the eight core sectors output growth remained in a negative trajectory for the 10th successive month with a contraction of 1.3 per cent during the month compared with negative growth of 1.3 per cent during November 2020 and 3 per centin December 2019. There has been an upward revision in the core sector output growth in November from -2.6 per cent to -1.4 per cent.

Barring coal and electricity, all other components of the core index continue to show de-growth. The cumulative index of eight core sector during April ??December 2020 contracted by 10.1 per cent indicative of the adverse impact on industrial production during the lockdown period compared with the 0.6 per cent growth in the corresponding period of last year. Barring fertiliser, there was a broad based contraction across sectors during this period. Double digit decline in output during this period is recorded in natural gas, refinery, steel and cement.

Key highlights:

  • Coal production growth grew by 2.2 per cent in December 2020, which is the slowest in the last 5 months. Coal production has recorded positive growth which indicates revival in demand for power post easing in lockdown and resumption of industrial activities.

  • Crude Oil production has fallen by 3.6 per cent in December 2020 due to COVID-19 restrictions/lockdown, nonavailability of drilling equipment and less than planned contribution from workover wells, drilling wells and old wells. The negative growth in crude oil production has sustained for nearly 3 years.

  • Natural gas production in the country fell by 7.1 per cent in December largely due to a fall in output of western offshore fields of private/JV companies. This is the 19th consecutive month of de-growth in natural gas production.

  • Refinery production has fallen by 2.7 per cent and fall in production has been narrowing with each passing month with the easing of restrictions and as the economy has been slowly reflating. There has also been an increase in refinery utilisation during December ??0 which is now 101 per cent and this can be ascribed to the increase in demand for petroleum products as there is an uptick in economic activities. The month of December 2020 saw growth in consumption of LPG 7.4 per cent, Petrol (MS) 9.3 per cent, Bitumen 20.9 per cent, Lubes & Greases 8.5 per cent, Light Diesel Oil (LDO) 87.4 per cent and products categorised under ??thers??8.4 per cent compared with December 19.

  • Fertilizer production has fallen by 2.9 per cent due to a high base effect and as the rabi sowing season almost comes to an end.

  • Output of steel sector has contracted for the second consecutive month by 2.7 per cent in December after registering three consecutive month of positive growth during Aug-October 2020. Low demand from automobile sector and high raw material costs and relatively muted construction activities in parts of the country must have weighed on the steel production.

  • Cement production fell to a 4-month low falling by 9.7 per cent in December 2020 compared with -7.3 per cent in November 2020 and 5.4 per cent in December 2019. The fall can be ascribed to muted construction activities.

  • Electricity production grew by 4.2 per cent in December 2020 compared with 3.5 per cent in November 2020 on account of further normalisation of economic activity.

CARE Ratings??View

Going ahead, the growth in the eight core sectors will be contingent upon the normalisation of economic activities and high base effect. The growth in industrial production is likely to be marginally positive but will be contingent on the growth in consumer durables segment.

Courtesy: CARE Ratings

ABOUT THE AUTHOR:

The article is authored by Sushant Hede, 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

Shree Cement Expands Bangur Concrete Network with Patna Plant

New facility takes the company’s national RMC network to 36 plants

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Shree Cement has inaugurated a 60 m³/hour ready-mix concrete plant in Patna, Bihar, under its Bangur Concrete brand. The facility takes the company’s ready-mix concrete (RMC) network to 36 plants across India and strengthens its presence in eastern markets.

The plant was inaugurated by Neeraj Akhoury, managing director of Shree Cement, in the presence of senior company officials and other guests. It has been established to serve demand for ready-mix concrete in Patna and neighbouring areas, where infrastructure development, urban expansion and real estate activity are supporting construction growth.

The facility is designed to supply construction projects across Patna and surrounding markets. Its installed capacity of 60 m³/hour will enable Bangur Concrete to serve customers across the region while improving distribution and supply capabilities in eastern India.

The expansion is intended to improve customer service, strengthen the company’s market presence and support development activity in Bihar. The plant incorporates modern batching technology, material handling systems and quality control processes aimed at maintaining consistency in production and improving operational efficiency.

With the addition of the Patna facility, Bangur Concrete now operates 36 RMC plants across India. The business is expanding its footprint in key construction markets to improve customer access to ready-mix concrete, which is increasingly used in infrastructure, commercial and residential projects because it supports controlled production, consistent quality and more efficient material management at construction sites.

The facility will also follow environmentally responsible operating practices, in line with Shree Cement’s focus on sustainable construction solutions. The latest addition adds capacity to the company’s RMC operations and supports its efforts to serve regional construction markets as development activity continues across Bihar.

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Concrete

Ambuja Plans 2.9 MTPA Godda Cement Unit

Proposed unit forms part of Ambuja Cements’ Rs. 145 bn expansion

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Ambuja Cements has proposed a 2.9 mn tonnes per annum (MTPA) cement grinding unit in Godda district, Jharkhand, as part of a Rs. 145 bn expansion programme. The plan is intended to lift the company’s overall cement capacity to 155 MTPA by financial year 2029-30 (FY30), from its current 113.5 MTPA.

The proposal forms part of the Adani Group company’s wider manufacturing expansion across eastern and northeastern India, according to a company statement issued on Monday. The Godda unit would add grinding capacity to Ambuja Cements’ network and is intended to help serve demand in Jharkhand and neighbouring states.

Locating production closer to these markets is expected to reduce transportation costs and delivery times, while the project could support employment in plant operations, maintenance, logistics and administration. The company also linked the facility to indirect activity in transportation, contract services, construction, warehousing and local supply chains.

The expansion plan includes a 2.9 MTPA grinding unit each in Assam and Bihar, as well as additional clinker capacity in Assam. Together, the projects are designed to distribute manufacturing capacity more widely and improve the connection between clinker production and grinding operations, Ambuja Cements’ cement-business chief executive Vinod Bahety said.

Clinker is the intermediate material produced before it is ground and blended to make cement, making the Godda proposal part of a broader materials and logistics network rather than an isolated facility. Ambuja Cements has not provided a commissioning timeline, a Godda-specific investment breakdown, land details or a detailed employment estimate in the supplied announcement.

The project’s impact will depend on implementation of the plant, associated transport links and local supply chains. The announcement sets out the capacity objective but does not specify the project’s construction schedule or operational start date.

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Concrete

Dhanekula Institute Signs MoU with Adani Cement

Agreement to expand internships, industrial visits and practical learning

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The Department of Civil Engineering at Dhanekula Institute of Engineering & Technology, Ganguru, organised an industrial interaction programme under the Adani FutureX Programme on Thursday. The programme focused on strengthening engagement between the institute and the cement industry while giving students greater exposure to professional practices.

Yedukondalu, technical head for Andhra Pradesh and Telangana at Adani Cement, delivered a technical lecture on concrete as a man-made material. The session covered the importance of concrete in construction, its properties and applications, and its significance in modern infrastructure development.

The lecture also addressed the role of quality cement and suitable concrete technology in supporting durable and sustainable construction. The discussion connected classroom learning with the technical considerations involved in infrastructure projects and construction practices.

A key part of the programme was the signing of a memorandum of understanding (MoU) between the Department of Civil Engineering and Adani Cement under the Adani FutureX Partnership Agreement. The agreement is intended to strengthen industry-academia collaboration through opportunities for student internships and industrial visits.

The initiative is expected to provide students with practical exposure, improve their understanding of industrial practices and help bridge the gap between theoretical knowledge and real-world applications. Dhanekula Institute Chairman Dhanekula Ravindranath Tagore, Secretary Dhanekula Venkata Bhavani Prasad and Director DKRK Ravi Prasad supported the initiative, with the institute leadership highlighting the importance of industry-institution interaction in enhancing students’ technical employability.

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