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Our Bureau

Mumbai Dec. 15

GRASIM'S cement division is planning to sharpen its focus on ready-mix concrete (RMC) market in the light of the brisk growth that the segment has been recording. The company has drawn up plans to grow in this segment by setting up RMC plants and through the franchise route.

The RMC market, which has grown from 2.65 lakh cubic metre in the first half of 2002-03 to 3.99 lakh cu.m in the corresponding period of the current fiscal, will be the "segment to vouch for in the future."

Overall, the company is bullish about a recovery in cement prices in the coming months. In the light of this projection, Grasim's cement division will lay special thrust on cost reduction through increased captive power share, higher manpower productivity, enhanced process efficiency and new initiatives in logistics management. Incidentally, the company is in the process of taking control of the de-merged cement business of Larsen and Toubro.

The company feels the cement industry is likely to grow about eight per cent annually in the medium term, with the high GDP growth forecast of 6 to 6.5 per cent auguring well for the construction sector, which accounts for about 60 per cent of the cement consumption. The growth in domestic demand has been supplemented by the export of clinker/cement.

Against the sector average of four per cent growth, the company's cement business has recorded a volume growth of six per cent, the eastern and southern markets growing by 16 per cent and 10 per cent respectively.

As for its textile business, the company feels that although there are signs of improvement in demand with the resurgence of the economy, prices will remain "under pressure" due to intense competition. However, with the quota-free regime round the corner, the opportunity for Indian exports is significant.

The textile business had turned around through restructuring efforts. With fabric sales rising by 21 per cent from 64 lakh mts in the first half of last year to 78 lakh mts in the corresponding period of this fiscal, the company's main focus will be on "re-orientation of product mix with a repositioning of brands."

As for the chemicals market, the company feels that even though the sector's outlook is challenging, given the overcapacity in the industry, the demand for caustic soda is expected to grow in line with the growth of the end user segments. "The prices of caustic soda will continue to be stable, though that of chlorine and HCL will be under pressure," it feels.

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