Cement sales volume halves in 2016

Cement sales volume halves in 2016
14/12/2016 , by , in ALLIED

Cement demand, especially in the trade segment, contracted significantly in certain regions of the country given the prevailing liquidity crunch.

Channel checks suggest that dealer counter sales, which are 50-70% cash-based, were hit up to a similar quantum in the first week post- demonetization, pointed out a report by Antique Stock Broking Ltd.

On a month-on-month basis, sales volume in the trade segment slipped 20-50% in November, according to a Reliance Securities Ltd report.

However, volumes in the non-trade segment did not see much of an impact.

“The impact on sales was lower in south India, which is considered a more mature market having higher contribution from the institutional segment and more reliance on formal ways of funding,” added the Antique report.

The biggest demand driver for cement firms has been the housing sector, as it accounts for nearly 60% of total consumption, followed by infrastructure and commercial sectors. Thus, companies with higher dependence on the home-building segment saw larger impact on sales on a year-on-year basis than others.

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