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G. Naga Sridhar

`A vibrant construction industry may not give room for it'

Hyderabad June 9 The onset of monsoon may not bring any significant relief in the persistent demand for cement this year if the opinion of industry experts and demand trend for the last two years are any indication.

According to data available with the Cement Manufacturers Association and the All India Mini Cement Manufacturers Association, the demand for cement had been falling in every monsoon season, i.e. between April and September, till 2005, compared to the previous year.

But in 2006, the scenario had changed and there was no significant fall in cement consumption. For instance, in 2005, the consumption stood at 11.3 million tonnes (mt) in April, 11.5 mt in May, 11.17 mt in June, 10.23 mt in July, 10.27 mt in August and 9.8 mt in September.

However, in 2006, the consumption (in monsoon period) did not show any considerable dip compared to the same period previous year.

The consumption stood at 13 mt in April, 12.65 mt in May, 12.75 mt in June, 11.19 mt in July, 11 mt in August and 12 mt in September.

"The industry is expecting that there could be no seasonal dip in cement demand this year. The upward surge in demand during the monsoon season began for the first time in 2006 and this would be further strengthened," Mr Ramesh Chandro, Managing Director, Coramandel Cements Ltd, and immediate past president of the All India Mini Cement Manufacturers Association, told Business Line.

"The vibrant state of the construction industry is unlikely to give room to any significant seasonal variations in demand," Mr A.S. Minocha, Chairman, DLF Commercial Developers, told during his recent visit here.

According to Mr Ramesh, the consumption trends of cement point to a significant increase in demand.

"If we take the ratio of Gross Domestic Production to cement consumption growth, over the next five years the compounded annual growth rate would be at 13.5 per cent,'' he said.

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