Cement prices, production beat the slump

03 April 2009

Cement companies are making hay despite the slump in construction activities and a lull in home sales across the country. Cement majors such as ACC, Ambuja Cements, Grasim and UltraTech have raised prices between Rs3 and Rs7 per 50-kg bag across the country from Wednesday. With this, the retail prices of cement have gone up to around Rs260 a bag.
 
ACC, the country's largest has increased prices by Rs 7 per bag, while Ambuja has hiked it by Rs 3 a bag. The Aditya Birla Group companies, Grasim Industries and UltraTech Cement, have raised Rs 5-7 per bag. Others like Binani, Shree Cement etc are expected to follow suit soon.

Cement demand has gone up in March. For example, the Aditya Birla Group's shipment in March rose 11.2% to 3.37 million tonne year-on-year.

With cement demand still ruling high, analysts do not expect prices to soften in the near future. Prices are expected to remain firm unless huge fresh capacities come up, they say.

The first quarter of FY10, in fact, looks better than what it was a year ago and industry analysts expects an 8 per cent incremental growth in the current fiscal.

ACC, the largest cement manufacturer in the country, is looking for a price of Rs300 per bag as it says, the current prices do not support plans to invest in fresh capacity.

ACC also reported a 5.85 per cent increase in cement production in March. The company produced 1.99 million tonnes of cement last month as against 1.88 million tonnes in March 2008.