Upcoming Power plant in Eastern region keeps demand for cement

Upcoming Power plant in Eastern region keeps demand for cement:

Central Electricity Authority or CEA indicated that India is unlikely to meet power generation targets from its eastern region by 2012 due to a shortage of cement. Work has already slowed down for these projects having a capacity of 250MW and 500MW. The shortage may delay power generation capacity of around 3,000MW from the region.

The growth of cement consumption in the eastern and central region in FY09 has outperformed the other regions for the first time in the last three years.

The eastern market, comprising the Northeastern states along with Bihar, Jharkhand, Orissa, Chhattisgarh and West Bengal, registered a rise of 11.32% in cement consumption at 28.21 mnT compared to 5.62% last year.

For FY09 the cement consumption in Bihar rose 12.58% to 5.1 mnT, and Jharkhand registered a growth of 16.48% at 3.11 mnT. Similarly, Orissa and Chhattisgarh witnessed a rise of 15.92% and 8.92% respectively. The total installed capacity in Eastern region is 30.5 mnT and addition expected is 6 mnT.

View: Captive Power Plant, cement costs around 10-12% and Hydro Power Plant cement costs around 35-40% of the project cost, in terms of quantity it varies from 1500-1600 tonnes for CPP and for Hydro 4500-4600 tonnes for 1 MW. The quantity cement required might be around 8-9 mnT. This will help to maintain the cement growth more than 10% in eastern region for another one year. The companies would be benefited are ACC, Lafarge, Ambuja Cements, Grasim, UltraTech, Birla Corp and Century Textile have their units in the east and hold reasonable market shares along with the regional players.