We therefore expect the cement prices to come back to fundamental levels by Q1FY2002. We are also not very bullish about a pick up in demand during the next fiscal. This is because the agricultural sector during FY2001 is expected to show a marginal growth compared to a negative growth during the previous fiscal. Two consecutive years of poor agricultural crop is likely to dampen demand for cement from the rural sector, which normally happens after a lag. On the other hand cumulative supply in FY2001 and FY2002 would be to the tune of around 14mn ton.
Global markets head for consolidation .
Lafarge buys out Blue Circle Consolidation in the cement industry is not restricted to India alone. Globally too the cement sector is witnessing a consolidation wherein larger cement companies are acquiring capacities in a bid to increase their market share. Lafarge acquired Blue Circle for Euro2.8bn in an all cash deal to become the largest producer of cement in the country. The deal has increased Lafarge's cement capacity to 150mn ton from 107mn ton. A fortune in black gold.