Home > Cement, Six Core Infra > Cement despatches in April: A cyclical movement

Cement despatches in April: A cyclical movement

The cumulative volume growth of the five domestic cement companies (including UltraTech Cement, Grasim Industries, Ambuja Cement, ACC, Jaiprakash Associates and JK Lakshmi Cement) fell by 7.7% in April compared to March 2010. Despatches are usually low in April as sales are pushed at the year-end (in March). The companies registered a 12.3% YoY growth in despatches.

Cement Despatches
  April ’10 April ’09 March ’10 % change
  million tonnes million tonnes million tonnes month-on-month year-on-year
Aditya Birla Group

3.38

3.17

3.70

-8.6%

6.6%

Ambuja Cement

1.89

1.64

1.92

-1.6%

15.2%

ACC

1.79

1.80

1.94

-7.7%

-0.6%

JK Lakshmi

0.35

0.31

0.45

-22.2%

12.9%

Jaiprakash Associates

1.25

0.79

1.37

-8.8%

58.2%

JK Lakshmi recorded a 12.9% growth YoY on the back of a healthy performance of its expanded capacities, including the grinding unit in Gujarat. Despatches by Jaiprakash Associates surged as its 2.4 mtpa cement plant in Sewagram, Gujarat, started production only recently.

The Aditya Birla Group, comprising Grasim Industries and UltraTech Cement, registered a volume growth of 6.6% YoY. Volume growth was achieved on the back of the company’s larger exposure in the northern region — where demand is rising due to infrastructure development for the Delhi Commonwealth Games. Capacity addition undertaken by the company also accounted for a part of this growth.

Cement prices have fallen by Rs 5-20 per 50-kg across regions due to lower cumulative demand in India. However, they are expected to stabilise since production is likely to be hampered by power cuts in a number of states.

Come June, and despatches will fall even further (on a sequential basis), because construction activity slows down during monsoons resulting in a lower demand for cement, reflecting cyclicity of the industry.

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Categories: Cement, Six Core Infra
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