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Cement Update
Nov ’10 dispatches decline 5.3%; YTD growth drops to 5.4%
Overall production and dispatches declined 4.3% and 5.3% yoy
respectively in Nov ’10. Inventory build-up with dealers during
Oct ’10 coupled with slow pick up in demand led to decline in
volumes in Nov ’10. Dispatches in the North and East rose 4%
and 5% yoy respectively, while declining 12%, 10% and 7% yoy in
the South, West and Central respectively.
Utilization levels drop. All-India capacity utilization for Nov ’10 was
67% (81% yoy, 83% mom). At 52%, the South recorded the lowest
and at 93%, the Central the highest utilization. No new capacity was
added during the month and installed capacity stood at 267m tons.
Top-4 companies post 2% volume decline. Combined volumes of
the top-4 cement companies for Nov ’10 declined 2% yoy, mainly
owing to dismal performance by Ambuja and UltraTech (down 9%
each). Outperformers in terms of volume growth were OCL India,
Prism, JK Cement, JP Associates and ACC.
Fall in prices. Prices in Dec ’10 declined `10-15 a bag in all regions
except central India, where they were stable. Demand growth during
December was slow, largely due to shrinking demand from
government and real-estate projects as well as owing to labour
shortage in some regions. Dealers expect demand to pick up post
mid-January.
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