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Cement sector: Dispatches decline 5.3% in Nov10

Anand Rathi | 28 Dec, 2010  | Follow Author | Add to my Favourites 
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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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