India's leading cement makers have maintained a healthy outlook for the domestic cement industry, despite the ongoing economic slowdown. ACC, India's biggest cement producer, has said that rural housing and infrastructure would be key demand drivers for the industry.
On part of the producers, Ambuja Cement Ltd noted that improved productivity and efficiency in operations would govern profitability levels in the days to come. Even Rajasthan-based Shree Cement Ltd said that it expected demand to come from government-backed infrastructure projects besides housing projects in semi-urban and rural areas.
ACC recorded cement sales of 5.73 million tonnes in the January-March quarter of 2009, up 6.1 per cent from 5.40 million tonnes in the same period of 2008. Ambuja Cement saw production growing by 5.7 per cent to touch 5 million tonnes in the trimester ending March 2009.
While all-India production statistics for 2008-09 (full year) are not available, government estimates suggest that during the first eleven months (April to February), cement production grew by 7.2 per cent, slightly lower than 7.9 per cent clocked in the same period of 2007-08. Physical production in 2008-09 (April to February) was an estimated 168.82 million tonnes.
CapexAmbuja Cements has stated that its Rs 5,000-crore capex programme was on track. Major expansion plans at Bhatapara and Rauri in Himachal Pradesh are expected to come online during 2009. With this, ACL expects its annual clinkerisation capacity to grow by 4.4 million tpa. Very recently, Holcim-owned company commissioned a 15-mw captive power at Bhatapara in Chhattisgarh, also beginning operations at the Kochi bulk cement terminal.
ACC has targeted to attain cement capacity of 30 million tpa by mid-2010, up from the current 23 million tpa. It has planned capital expenditure of Rs 1,600 crore in 2009-10 followed by Rs 1,300 crore in 2010-11, the Mumbai-based company said. ACC expects to finance its expansion plans largely through internal accruals.
Meanwhile, Shree Cement, a leading Rajasthan-based cement maker, has announced that it would invest Rs 1,200 crore during 2009-10 to ramp up capacity by 2.5 million tpa from the current 10 million tpa. Half of this capex would go towards setting up two grinding units in Rajasthan and Uttarakhand, while the remaining would be used to build captive power plants in Rajasthan.