Southern cement units may suffer due to over-capacity and low demand

As per the figures available on capacity addition for cement, cement units in the southern region will add the highest capacity in 2010 and 2011. India Cements, Dalmia Cement and Madras Cement are the key players in the southern region. All over India, 47.5 million tonne (MT) of cement capacity is expected to be added in 2010 and 19.2MT by 2011. Out of this, the southern region is expected to add around 20MT in the year 2010. For the year 2011, the highest capacity addition of 7.8MT will happen in the eastern region.
 
In the best case scenario assuming delay in capacity addition, the total capacity for the south is expected to grow by 26.9% from 66.1MT in FY09 to 83.9MT in FY10.
 
Industry watchers expect the cement demand for the south to be 56.6MT for 2010. This means a serious demand shortfall of 26.5MT. Similarly, the capacity for FY11 is expected to be 96.5MT and expected demand is 63.4MT, which again implies a serious demand shortfall of 33.1MT.
 
The cement industry in the southern region satisfies around 96% of its own consumption needs and routes the remaining produce primarily to the western region and marginally to the eastern region.
 
The capacity utilisation or operating rates for the cement industry in southern India too are not favourable. As per CRISIL Research reports, the operating rates for the cement industry all over India, is expected to fall from 88% in 2008-2009 to 77% to 2010–2011. The southern and northern regions are expected to suffer a steep fall in operating rates of below 75%.
 
Unless demand for cement goes up drastically, the southern region may be plagued by overcapacity for years. Around 45% of the total capacity addition in the next five years is expected to happen in the southern region.
 
Stock prices for Dalmia Cement witnessed a gain of 44% at a current price of Rs184.55, India Cement recorded a gain of 3% at current price of Rs134.50. Madras cement witnessed a gain of 19% at the current price of Rs121.20 over the past three months. In the same period, the Moneylife Cement Index went up by 14%.
–Amritha Pillay [email protected]

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Nissan to produce compact car in India from May 2010
Japanese car maker Nissan Motor Co Ltd has said that it will start the production of its global compact car from May 2010 in five countries, including India.
 
Unveiling the sketch of its compact car, Kiminobu Tokuyama, managing director and chief executive, Nissan Motor India Pvt Ltd (NMIPL) said, "We are confident that the car which will be manufactured locally in Chennai will delight the discerning Indian customers. We are serious and committed in our plans for India and are all excited as we gear up for the start of production in May 2010."
 
Besides India, the car will be produced in Thailand and China and would be sold across 150 countries, Nissan said in a release.

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NCR says it records India's highest image-based cheque clearing
Technology company NCR Corp said it processed about 1 million instruments on Wednesday using its image-based cheque clearing solution implemented for the Reserve Bank of India, which NCR claims is a record.
 
"This is the first step towards introducing electronic cheque clearing in our country which will enable cheques to be cleared 50% faster than before, ensuring more timely credits," said Navroze Dastur, general manager for payments, NCR.
 
In a release, NCR said this is the largest volume of cheque clearing and settlement in the world outside the USA. This work is being done as part of the bank's cheque truncation system (CTS) project—a key banking initiative of national importance in the National Capital Region of Delhi.
 
NCR's electronic check presentment with image exchange (ECPIX) solution which went live in February 2008 achieved a volume of 550,000 instruments per day by June last year.
 
With all banks in the National Capital Region of Delhi now going live, NCR has set a new benchmark for 1 million instruments per day in the country through image-based cheque clearing. The inter-city cheque clearance will be done in a single working day which earlier would take two working days for clearance, it said.
-Yogesh Sapkale [email protected]

 

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