Lafarge expects robust demand in India

French cement company Lafarge, the world's largest maker of the product, is betting big on its Indian operations in 2010, with volume growth aimed at a high 11 per cent. By contrast, its average growth expectation for the world is only 5 per cent.

In Asia, the French giant is expecting more growth in India than in China and Bangladesh.

The company expects cement prices in its relevant markets in India to remain firm in the calendar year. It sells cement under two brands, primarily in the markets of West Bengal, Jharkhand, Bihar, Chhattisgarh, Orissa and the northeastern states. Its products are also available in some parts of Maharashtra, Madhya Pradesh, Uttar Pradesh, Andhra Pradesh and the national capital region.

Bruno Lafont, chairman and global chief executive officer, Lafarge, said: "We see emerging markets providing solid growth potential. Our development programme has already added cement capacity in these markets, enabling Lafarge to capture this growth."

In 2009, while the company's cement sales were 10 per cent down globally, its Indian markets registered a rise of 18 per cent in volumes, second to China. In its outlook statement, Lafarge said, "Emerging markets continue to show strength and cement volumes in these markets will continue to drive demand in 2010."

Lafarge has a cement making capacity in India of 6.5 million tonnes a year and owns four units, two in Chhattisgarh and one each in Jharkhand and West Bengal. It is expanding to become a pan-India player, to insulate itself from price and demand fluctuations.

It already had embarked on unit expansion in Chhattisgarh and Himachal Pradesh; once done, this will take its annual capacity up to 12 mt per annum.

It also has plans for three new units, with a capacity of 2.5 mt each in Rajasthan, Karnataka and Meghalaya, with an investment of over $1 billion (Rs 4,600 crore).

Lafarge had entered the Indian market in 1999, by acquiring the cement unit of Tata Steel. It acquired those of Larsen & Toubro in 2008.

From China Cement (2010-2-24)