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Cement production to grow by 5-7% in FY20, amid stable prices

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Cement production in the country is likely to grow by 5-7 per cent during FY20 (2019-20). Roads, urban infrastructure and commercial real estate are seen as the key demand drivers for cement.

During 2018-19, cement production grew by 13.3 per cent to 337.3 million tonne (mt) against 6.3 per cent growth in FY18, the fastest growth in production of cement recorded in one single year over the last decade.

"Southern and eastern regions would continue to be the major regional demand drivers. Prices are expected to remain stable. Retail segment demand would be the key to strengthening of cement prices. Eastern region may witness strengthening of cement prices followed by western and central regions", said Care Ratings in a report titled "Manufacturing & Service Industries: Review FY19 & Outlook FY20."

Destruction due to cyclone Fani is also expected to drive demand in the coastal region of eastern states namely Odisha and West Bengal in Q1FY20, the report added. It may be noted that the extremely severe cyclonic storm Fani, which made a landfall in Puri, had caused widespread damage in Odisha.

In the last financial year, government’s thrust on development of urban infrastructure, roads and highways and ports, coupled with steady demand from real estate, especially segments like commercial realty, rural and affordable housing were the key demand drivers of cement.

"The institutional demand for cement (infra and real estate) remained strong during the year (FY19). Implementation of key projects across infrastructure segments like roads, urban infrastructure and rural by the government prior to General Elections led to strong cement demand. Cement volume growth from these segments of construction was strong across states like Uttar Pradesh, Madhya Pradesh, Delhi-NCR, Odisha, Bihar and Rajasthan", the report highlighted.

Retail segment demand was strong in the southern states especially Kerala and Tamil Nadu as these states were affected by natural disasters that led to large-scale reconstruction in Q3 and Q4 of FY19. Demand from retail segment led to increase in prices of cement across these markets.

In other regions, especially northern and central, cement producers chose to partly pass-on increased costs of input materials like limestone, coke and coal, to consumers. A two to five per cent increase in 50-kg bags was reported across these regions.

Overall capacity utilisation for the sector was around 71 per cent during the year (FY19), which is a positive for the sector and is expected to drive investments over the next three years, the rating agency exuded hope.

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Concrete

CCU testbeds in Tamil Nadu

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Tamil Nadu is set to host one of India’s five national carbon capture and utilisation (CCU) testbeds, aimed at reducing CO2 emissions in the cement industry as part of the country’s 2070 net-zero goal, as per a news report. The facility will be based at UltraTech Cement’s Reddipalayam plant in Ariyalur, supported by IIT Madras and BITS Pilani. Backed by the Department of Science and Technology (DST), the project will pilot an oxygen-enriched kiln capable of capturing up to two tonnes of CO2 per day for conversion into concrete products. Additional testbeds are planned in Rajasthan, Odisha, and Andhra Pradesh, involving companies like JK Cement and Dalmia Cement. Union Minister Jitendra Singh confirmed that funding approvals are underway, with full implementation expected in 2025.

Image source:https://www.heavyequipmentguide.ca/

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Concrete

JSW Cement gears up for IPO

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JSW Cement has set the price range for its upcoming initial public offering(IPO) at US$1.58 to US$1.67 per share, aiming to raise approximately US$409 million. As reported in the news, around US$91 million from the proceeds will be directed towards partially financing a new integrated cement plant in Nagaur, Rajasthan. Additionally, the company plans to utilise US$59.2 million to repay or prepay existing debts. The remaining capital will be allocated for general corporate purposes.

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Concrete

Cement industry to gain from new infrastructure spending

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As per a news report, Karan Adani, ACC Chair, has said that he expects the cement industry to benefit from the an anticipated US$2.2tn in new public infrastructure spending between 2025 and 2030. In a statement he said that ACC has crossed the 100Mt/yr cement capacity milestone in April 2025, propelling the company to get closer to its ambitious 140Mt/yr target by the 2028 financial year. The company’s capacity corresponds to 15 per cent of an all-India installed capacity of 686Mt/yr.

Image source:https://cementplantsupplier.com/cement-manufacturing/emerging-trends-in-cement-manufacturing-technology/

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