According to the provisional figures provided by the Cement Manufacturers Association (CMA), cement production registered a marginally better growth at 22.63 per cent or an increase of 4.5 mt to touch 24.4 mt in April-June quarter this year from 19.9 mt last year.

In June 1999, cement production remained over the eight mt mark at 8.3 mt against 6.6 mt in the same month last year, an impressive growth of 24.4 per cent. At the same time, despatches of the construction material moved up to 8.2 mt from 6.6 mt in June 1998, an increase of 24 per cent.

In May 1999, cement production and despatches stood at 8.1 mt and eight mt respectively. Analysts expect cement production to taper off from its growth path from next month onwards whenthe monsoons dampen construction activities.

Industry sources said the growth in production and despatches signals a revival in cement demand, which has been depressed for over an year. The demand surge is largely due to the government's positive signals for the cement industry, including the Budget. Traditionally during July-September, the production as well as despatches register a slowdown as cement offtake is limited due to the monsoons.

"The industry expects the growth to continue during the later part of the year too irrespective of the lean period during the monsoons. Production will only be cut down marginally during the period,'' industry sources said.

With demand firming up, cement prices have also shot up during the past two months. In fact, major manufacturers have increased the prices of 50-kg cement bags twice, by Rs 3-5 per bag each time.

Industry sources pointed out that the market had sustained the rally of prices as the rates had been suppressed for the past several months and alsoas they were purely demand-led. "Increased demand and subsequent price hikes will also help several companies to improve their balance sheets," sources added. Production in April 1999 was 8.13 million tonne, which went up marginally to 8.14 million tonne in May 1999.