Sri Lanka Cement Demand to Grow 7pct in 2010

16th June 2010, www.lankabusinessonline.com

Sri Lanka's cement demand is expected to grow between 6.0 and 7.0 percent in 2010 driven by reconstruction demand from former war-torn areas, a top Sri Lankan cement maker said.

"There is an increased demand from all areas of the country," Manilal Fernando, chairman of the Sri Lanka unit of Holcim, a Swiss-based firm said.

"We feel that coupled with the increase in reconstruction in the North and the East cement demand will grow by 6.0 to 7.0 percent this year."

Holcim is the island's only integrated cement maker, which produces cement from limestone and it also has a grinding plant.

Tokyo Cement, a listed group operates several grinding plants.

A war in Sri Lanka's north east ended in May 2009, along with a balance of payments crisis, and interest rates have come down with the monetary authority ending contradictory policy.

Lower interest rates have also paved the way for a recovery in a burst housing bubble.

Official data showed that the cement market was growing by double digits in 2010.
Data released by the Central Bank showed that in the first quarter of 2010 local cement production grew 10.6 percent to 417,000 metric tonnes and imports grew 12.5 percent to 486,000 metric tonnes from a year earlier.

In March local production grew 5.1 percent to 143,000 metric tonnes, and import grew 9.4 percent to 326,000 tonnes from a year earlier.