Upswing in cement signals revival

This was revealed in a survey undertaken by Ficci on Indian cement industry. The information was compiled from cement industry in the organised sector.One of the major findings of the study is that despatches in April 1999 grew by 26 per cent and in May by 16 per cent indicating the first sign of revival of demand in key sectors such as housing and infrastructure.

Also, the capacity utilisation for most of the bigger companies is beyond 85 per cent. The outlook continues to be a “cautious optimism” since capacity utilisation significantly depended on sustained increase in infrastructure activities.

Consequent to theconcession offered to the housing sector in the Union budget, housing finance companies are witnessing a sharp rise in the loan application in the new financial year. HDFC showed a 30 per cent rise in loan application in April compared to the same period last year. Hudco’s sanction in 1998-99 Rs 6666 crore went up by 118 per cent against last year’s Rs 3062 crore.

International firms had also taken keen interest in taking over cement units in India, it said adding the takeover by Lafarge of TISCO’s cement division was just a beginning. Other foreign companies like Scancem of Norway, Holderban of Switzerland and Blue Circle of USA have also shown keen interest in the Indian market, it said.

Referring to reasons for the enhanced multinational interest, the chamber said the low valuation of cement units in Asia and also the low prices of cement had encouraged the cement giants to set up their production base in India.

With change in technology, it may be now possible to export cement in the intermediateform, Ficci said adding India and other production bases, particularly those near the ports, would become attractive for cement MNCs.