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India's cement production may grow at 6-7pct in FY19 - Icra

Infra News - Published on Fri, 05 Oct 2018

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PTI reported that cement production is expected to grow at 6-7 per cent in the current fiscal year, driven by pick-up in affordable and rural housing segments and infrastructure. However, rising costs are likely to put pressure on the operating profitability of cement firms in the coming quarters, Icra said in its report, adding the manufacturers' ability to secure price increases remains the key. Sabyasachi Majumdar, senior vice-president, Icra, said that "We expect cement demand growth of 6-7 per cent in FY2019, driven by a pick-up in the affordable and rural housing segments and infrastructure, primarily road and irrigation projects."

According to the rating agency, cement production remained healthy in the first four months of FY19, reporting a 14.7 per cent YoY growth. Production remained in the range of 27.5-28.6 million tonne (mt) during the April-June period, clocking the highest at 28.6 mt in June. It declined in July by 9.3 per cent on a month-on-month (MoM) basis owing to the monsoons, when cement consumption is on the lower side. However, it remained high by 10.8 per cent on a YoY basis, at close to 26 mt.

The report said that the trend was supported by demand, driven primarily by low-cost housing (in south - AP and Telangana; and in the east - except Bihar) and a pick-up in the execution of infrastructure projects (in south - AP and Telangana and in the eastern and western regions).

It said that on the capacity side, Icra estimates that around 17-19 mtpa will get added in FY19-20, primarily in the east and central regions. However, the actual production from new capacities could be lower, given that a disproportionate part of the capacity addition is largely grinding as opposed to clinker capacities.

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Posted By : Nanda Koijam on Fri, 05 Oct 2018
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