>CEMENT SECTOR: Dispatch growth improves to 11.5%; prices rise slightly (ANAND RATHI)

■ Dec ’09 volume growth at 11.5%. In Dec ’09, all-India cement production and dispatch rose 11.4% and 11.5% yoy, respectively. The Central and East grew 18.4% and 12.9% yoy, respectively, while the West was the worst, rising only 6.1% yoy. Dispatches in the South grew 12.3% yoy in Dec ’09, after rising an average 6% during Apr- Nov’09.

■ The South leads in capacity additions. Capacity during the month increased by ~1m tons, and now stands at 234m tons. The industry has added 26m tons in the last nine months, 54% (13.9m tons) in the South. The all-India capacity utilization stood at 91% (92% yoy and 81% mom). At 81%, the South recorded the lowest utilization; at 111%, the Central the highest.

■ Top five post strong volume growth. Combined volumes of the top five for Dec ’09 rose 8.1% yoy, boosted mainly by the strong India Cements’ 34.9% yoy growth. Outperformers in volume growth were JPA, Dalmia, India Cements, Madras Cements and Shree Cements.

■ Prices inch up slightly. Prices in Jan have risen Rs4-8 in the North, Central, East and West; and been stable in the South. Demand during Dec-Jan has not picked up as usually seen in Jan, chiefly due to a slowdown in government projects and real estate activity. Dealers expect price hikes to hold, and demand to pick up by end-Jan.

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