Cement production finally turns the corner
Cement

Cement production finally turns the corner

Despite registering a negative growth rate in the previous seven months, cement production increased by 2.8% in October, the latest report from CARE Ratings says. The report cites major reasons as increase in demand with the pickup in infrastructure projects that had been stalled due to the nationwide lockdown, receding of the monsoons and return of several migrant workers. Domestic cement production has fallen by 21.3% during 7M-FY21 compared with the 15% growth and 0.6% degrowth in production achieved during 7M-FY19 and 7M-FY20.

Domestic manufacturers’ capacity utilisation has been around 47% during 7M-FY21 as units have been operating at sub-par capacities along with staggered shifts but has increased from it being 45% during H1-FY21. Given the fall in demand and companies looking to conserve their capital/cash flows, cement manufacturers had cut down or deferred capex. Although lately, some players have been announcing capex expansion of capex guidance plans.

Cement demand is closely linked to the overall economic growth of the housing and infrastructure sector. Increasing demand from affordable housing and construction work for other government infrastructure projects, cheap housing loans and the need for space, non-trade segment gaining momentum with the resumption of construction work of institutional infrastructure projects drive the demand for cement.

A significant factor which aids the growth of this sector is the ready availability of limestone and coal. Due to various cost rationalisation measures and overhead controls undertaken by cement manufacturers, there has been an increase in the operating profit margins (OPM), net profit margins (NPM) and interest coverage ratio during Q2-FY21 and H1-FY21. Cost of raw materials too declined by 20.3% during H1-FY21 due to the overall fall in the prices of limestone but has increased by 3.7% on a y-o-y basis and by 44.8% on a q-o-q basis. The overall sales revenue has increased by 6% during Q2-FY21 y-o-y but has declined sharply by 11.6% during H1-FY21 y-o-y.

Despite registering a negative growth rate in the previous seven months, cement production increased by 2.8% in October, the latest report from CARE Ratings says. The report cites major reasons as increase in demand with the pickup in infrastructure projects that had been stalled due to the nationwide lockdown, receding of the monsoons and return of several migrant workers. Domestic cement production has fallen by 21.3% during 7M-FY21 compared with the 15% growth and 0.6% degrowth in production achieved during 7M-FY19 and 7M-FY20.Domestic manufacturers’ capacity utilisation has been around 47% during 7M-FY21 as units have been operating at sub-par capacities along with staggered shifts but has increased from it being 45% during H1-FY21. Given the fall in demand and companies looking to conserve their capital/cash flows, cement manufacturers had cut down or deferred capex. Although lately, some players have been announcing capex expansion of capex guidance plans. Cement demand is closely linked to the overall economic growth of the housing and infrastructure sector. Increasing demand from affordable housing and construction work for other government infrastructure projects, cheap housing loans and the need for space, non-trade segment gaining momentum with the resumption of construction work of institutional infrastructure projects drive the demand for cement. A significant factor which aids the growth of this sector is the ready availability of limestone and coal. Due to various cost rationalisation measures and overhead controls undertaken by cement manufacturers, there has been an increase in the operating profit margins (OPM), net profit margins (NPM) and interest coverage ratio during Q2-FY21 and H1-FY21. Cost of raw materials too declined by 20.3% during H1-FY21 due to the overall fall in the prices of limestone but has increased by 3.7% on a y-o-y basis and by 44.8% on a q-o-q basis. The overall sales revenue has increased by 6% during Q2-FY21 y-o-y but has declined sharply by 11.6% during H1-FY21 y-o-y.

Next Story
Equipment

Handling concrete better

Efficiently handling the transportation and placement of concrete is essential to help maintain the quality of construction, meet project timelines by minimising downtimes, and reduce costs – by 5 to 15 per cent, according to Sandeep Jain, Director, Arkade Developers. CW explores what the efficient handling of concrete entails.Select wellFirst, a word on choosing the right equipment, such as a mixer with a capacity aligned to the volume required onsite, from Vaibhav Kulkarni, Concrete Expert. “An overly large mixer will increase the idle time (and cost), while one that ..

Next Story
Real Estate

Elevated floors!

Raised access flooring, also called false flooring, is a less common interiors feature than false ceilings, but it has as many uses – if not more.A raised floor is a modular panel installed above the structural floor. The space beneath the raised flooring is typically used to accommodate utilities such as electrical cables, plumbing and HVAC systems. And so, raised flooring is usually associated with buildings with heavy cabling and precise air distribution needs, such as data centres.That said, CW interacted with designers and architects and discovered that false flooring can come in handy ..

Next Story
Infrastructure Urban

The Variation Challenge

A variation or change in scope clause is defined in construction contracts to take care of situations arising from change in the defined scope of work. Such changes may arise due to factors such as additions or deletions in the scope of work, modifications in the type, grade or specifications of materials, alterations in specifications or drawings, and acts or omissions of other contractors. Further, ineffective planning, inadequate investigations or surveys and requests from the employer or those within the project’s area of influence can contribute to changes in the scope of work. Ext..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?