Cement companies posted higher sales in Jan

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Cement makers today reported double-digit growth in January sales driven by increased demand from housing sector, especially of low-cost homes, and infrastructure.

Shree Cement, JK Lakshmi and Jaiprakash Associates have recorded better sales growth in the month, while major players like ACC could only witness a marginal increase.

Jaiprakash Associates saw its January sales jumping by 60 per cent to 11.65 lakh tonnes, Shree Cement reported a 17.66 per cent rise in sales at 8.82 lakh tonnes, and JK Lakshmi Cement clocked a 38 per cent increase in sales at 5.06 lakh tonnes. But ACC reported almost flat growth at 19.1 lakh tonnes against 18.9 lakh tonnes last January.

Generally, cement sales start picking up from January and the peak period ends with the arrival of the monsoons in June.

Meanwhile, companies are anticipating poor margins as the industry is adding its highest-ever capacity in a single year. During 2008-09, the installed capacity was 204.8 million tonnes (mt), and this is likely to touch 270 million tonnes per annum (mtpa) by the end of this fiscal.

Against this, the annual demand was 178.2 mt in 2008-09 and is expected to be 198 mt by the end of the current fiscal and 220 mt by next the fiscal.

Though the industry watchers are projecting a handsome 10 per cent growth in demand in the next fiscal, there will still be a wide supply-demand gap, which is bound to have a bearing on the cement makers' profitability.