Swiss cement giant Holcim is optimistic about the outlook for its biggest customer India, according to an interview with Reuters. Chief Executive Bernard Fontana told Reuters "There are some positive signs coming from India". Despite slower economic growth of 5.3 per cent this year Fontana told Reuters
Even with 5 percent GDP growth, you can have significant growth of cement. We believe that the need will be higher to meet the demands of the population.
Fontana drew his optimism partly from studies showing infrastructure demand increased by 15 per cent in the run up to an election. The Indian general election is to take place in eight months time. Fontana also observed that cement consumption in India is around 85 kilograms compared to the world average of 480 kilograms providing ample opportunity for the company to make further inroads.
Holcim has however been harmed by the dramatic fall in the value of the Rupee which has lost 14 per cent of its value this year. The 5 per cent fall in the first half of the year resulted in 19 million Francs being lost off the operating EBITDA.
The Swiss company with a presence in 70 countries and 90,000 employees has had a mixed year. In August Holcim stated they had decreased financial debt by £820,000 compared to the same period the previous year (release).
However slower than expected economic growth in the first half of 2013 reduced construction global economic growth in the first half of 2013 and severe weather reduced construction in many areas with consolidated cement sales down 3.7 per cent and consolidated net sales were down 5.1 per cent. Holcim remains less optimistic about prospects in Europe, Africa and the Middle East. Whilst the company expects an increase in cement sales this year, it does not expect to match last year's aggregates of and ready mix concrete businesses.