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Cement: Weakened Demand to Impact Capacity Expansion, Profitability

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The sharp decline in demand in FY2021 will delay capacity addition and impact profitability in the cement sector in the medium-term, warns a CRISIL report.

The economic woes caused by the ongoing COVID-19 pandemic are likely to result in a marked decline in demand for cement in the current financial year, a report has warned.

The report, Cement Cracks, by CRISIL has warned of a 10-15 decline in the demand for cement in 2020-21 fiscal owing to the rollout of the nationwide lockdown and other social distancing measures. Demand is likely to slowly start picking up traction from 2H2021.

"On a quarterly basis, cement demand would be a washout in the first quarter of this fiscal, given lockdown measures across India that would hurt construction. Demand will pick up only from the second half of this fiscal," Isha Chaudhary and Koustav Mazumdar said in their April 8 report.

The analysts further added that complete recovery would take longer due to lower Capex by government, given diversion of funds towards health and public welfare, weakened demand for real estate and private individual houses and buildings (IHB) and a lower spend under Pradhan Mantri Awas Yojana (PMAY-Urban) given the impact on incomes. Presently, government-backed projects account for 35-40 per cent of the demand for the commodity.

However, projects in rural housing, PMAY (Rural), Pradhan Mantri Gram Sadak Yojana (PMGSY), and spend on key infrastructure projects will start to provide some relief to the sector from the second half of the year.

"Washout in the first quarter, followed by continued mildness through the seasonally weak second quarter, will weigh on the sector’s growth, leading to a first-ever demand contraction of this proportion for it this fiscal," the report stated.

"Contracting demand growth will push the sector’s utilisation level down further to 56-58 per cent, adding to the pain from the weakening seen in fiscal 2020, when incremental supply exceeded demand by 27 million tonnes (MT)," it added.

CAPACITY EXPANSION, PROFITABILITY TO BE IMPACTED
The demand shock owing to the disruption caused by COVID-19 pandemic and the ongoing nationwide efforts towards its containment is expected to affect the capacity addition plans of the industry, and stall or delay projects in the medium-term.

Despite weak demand, the cement industry had registered a decent price increase of Rs 25 per bag in FY2020 owing largely to consolidation in the regional markets by bigger players. This and lower commodity prices are likely to drive margins at cement companies to a seven-year high during the fiscal.

However, the study anticipates the price increase to reverse as players struggle on the demand front. The decline would be limited to 1-2 per cent (or Rs 5-10 per bag) as players exhibit pricing discipline, with realisations declining 2-3 per cent as the share of non-trade is likely to increase.

"Profitability, on its part, is expected to be under pressure after some expansion last fiscal. The impact of demand freefall, though, will be limited by lower input prices, the report said.

Because of directions on social distancing issued by the centre and state governments to prevent infections, leading cement manufacturers like ACC, India Cements, Ramco Cement, Ultra Tech Cement and Dalmia Cement (Bharat) temporarily suspended cement production across their plants in late March.

Manish Pant

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Economy & Market

RAHSTA to pave the way for innovation in road construction: AK Singh, NHAI

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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

“I congratulate the RAHSTA committee for this very good initiative. I believe it will provide an excellent platform for capital goods, consultant firms, equipment companies, and technology firms to converge. This meets a crucial need within the industry. The event also benefits older industries, as new technology and equipment continuously enter the market. These advancements are often cost-effective and, at times, eco-friendly. Thus, this platform is poised to play a significant role,” said Ashish Kumar Singh, CGM – Finance, National Highway Authority of India, signifying the importance of the expo.

AK Singh 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. 

“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

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Road construction leaders launch RAHSTA Expo 2024 in Delhi

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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 Ministry of Road Transport & Highways have constructed 12,349 km of national highways in 2023-24 – the 2nd 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 (Chairman of RAHSTA Expo Committee) underscored the need for specialised platforms like RAHSTA Expo for the burgeoning road construction industry. AK Singh, CGM – Finance, National Highway Authority of India, R K Pandey (former NHAI member and Member of RAHSTA Expo Committee), S K Nirmal (Secretary General, Indian Roads Congress, and Member of RAHSTA Expo Committee), Prof Satish Pandey, Principal Scientist, CSIR-Central Road Research, 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 (MD, 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.

“With 6.3 million km, India has the second-largest road network in the world. National Highways has witnessed 58 per cent growth since 2013, a testament to India’s ambition. As per Interim budget 2024-25, the government will spend a record Rs 11.11 trillion on infrastructure creation in 2024-25 to ensure India remains one of the world’s fastest growing major economies. In this backdrop, the RAHSTA Expo will play a crucial role in driving progress towards more resilient, inclusive, and environmentally sustainable transportation infrastructure,” said Vipin Sondhi, Chairman, RAHSTA Expo Committee, signifying the importance of the expo.

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

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Economy & Market

Road construction industry launches RAHSTA Expo 2024 in Delhi

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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 9, 2024, Delhi

FIRST Construction Council, a pioneering infrastructure-driven council focused on advancing India’s infrastructure development, will host a road show – SAHI RAHSTA – at PHD Chamber, Delhi, on April 9, 2024 to launch its 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. Distinguished industry experts such as Vipin Sondhi (Chairman of RAHSTA Expo Committee), R K Pandey (former NHAI member and Member of RAHSTA Expo Committee), and S K Nirmal (Secretary General, Indian Roads Congress, Ministry of Science and Technology, and Member of RAHSTA Expo Committee) will be the guiding force behind the RAHSTA Expo. 

The launch function at PHD Chamber for RAHSTA Expo will be attended by who’s who of the infrastructure industry such as Vipin Sondhi, R K Pandey, S K Nirmal, Prof Satish Pandey (Principal Scientist, CSIR-Central Road Research), Akhilesh Srivastava (Road Safety Ambassador, International Road Federation), Sandeep Singh (MD, Tata Hitachi Construction Machinery), Rajesh Menon (Director General, Society of Indian Automobile Manufacturers), Subodh Dixit (former Executive Director, Engineering & Construction Shapoorji Pallonji), Vijay Agrawal (Director, Equirus Capital), and Dr Ranjeet Mehta (Executive Director of PHDCCI), among others.

“With 6.3 million km, India has the second-largest road network in the world. National Highways has witnessed 58 per cent growth since 2013, a testament to India’s ambition. As per Interim budget 2024-25, the government will spend a record Rs 11.11 trillion on infrastructure creation in 2024-25 to ensure India remains one of the world’s fastest growing major economies. In this backdrop, the RAHSTA Expo will play a crucial role in driving progress towards more resilient, inclusive, and environmentally sustainable transportation infrastructure,” said Pratap Padode, Founder & President, FIRST Construction Council, signifying the importance of the expo.

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

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