According to the Cement Manufacturers’ Association (CMA), the industry, which is expected to grow at about 1.2 times of the country’s GDP growth this fiscal, is estimated to have sales growth of 8-9 per cent in 2008-09, but profit margins are likely to dropped by 20 per cent for the same year.

“In 2009-10, about 50 MT of capacity will be added to the country’s total cement production,” CMA president H M Bangur told reporters here.

In the last fiscal, the 30 MT of capacity were added and the additional production of 50 MT this year would fulfill India’s overall requirement, he said.

As on March 31, the country had an installed capacity of 210 million tonnes, while production stood at 181 MT in FY’09, he added.

Bangur, however, said the industry’s overall profit margin was expected to be lower by 20 per cent in 2008-09 due to rising input costs.

“Profit is falling due to cost structure… earlier most of the manufacturers used to get coal by linkage, but now over 50 per cent of this fuel is purchased from the open market or imported,” he added.

Fitch cited “steep declines” in the company’s fourth-quarter sales volumes as well as the devaluation of the Mexican peso, British pound and Euro versus the U.S. dollar. 

Further, ratings have been placed on “Rating Watch Negative” because of the challenges Cemex, the world’s third-largest cement producer, faces in trying arrange financing that will let it meet debt coming due over the next few months, Fitch said.

Cemex’s debt maturities during the second, third and fourth quarter of this year are $473 million, $428 million and $2.2 billion, respectively. In 2010 and 2011, Cemex faces debt amortizations of $3.8 billion and $7.8 billion, respectively.

“If successful (in servicing its debt), Cemex’s risk will remain high until it reaches a broader agreement with the banks that will allow it to lengthen the maturity schedule of a significant portion of its debt that comes due in 2009, 2010 and 2011,” the agency said.

At the end of last year, Cemex had total adjusted debt of $23 billion and cash and marketable securities of $993 million.

In afternoon trading, the company’s American Depositary Shares rose 58 cents, or 14.4 percent, to $4.60, as the broader markets surged.

Yamama Cement, the country’s third largest cement producer, said net income in the fourth quarter of this year has dropped 33 per cent to 85.1 million riyals ($22.69m) from 126.9m riyals in the corresponding period in 2007.

“The reason for the decline (is) lower sales volumes due to the decision to ban cement export as well as the periodic maintenance of some main production lines,” Yamama said in a statement on the bourse website.

Earlier, Tabuk Cement said net profit in the fourth quarter had fallen more than 68pc on lower sales and rising costs as a ban on exports kicked in.

In a regulatory filing, the cement producer said net income in the fourth quarter was 14.5 million riyal compared with 45.7m in the same period in 2007.

The firm said the decline was down to renovation work at its Amrat plant which led to a fall in production and rise in costs.

“In addition (there was) a decline in sales and revenues,” the firm said.

Earthjustice, an environmental law firm based in Washington, sued the Environmental Protection Agency in 2007 on behalf of activist groups. The firm said existing federal regulations that exempted older cement kilns failed to impose adequate mercury pollution controls.

Nine states, including New York and Michigan, also joined the suit, contending the agency had not based its standards on the latest pollution control technology.

About 150 kilns around the nation generate nearly 23,000 pounds of airborne mercury a year, according to Earthjustice. Mercury, a toxic metal that can damage the brain and nervous system, is generated from the raw materials and some fuels used in cement-making.

The agency had issued mercury regulations for cement plants three years ago, but they applied only to kilns built after Dec. 2, 2005. Most operating kilns, however, were built earlier and were exempt.

Under the settlement, the agency will propose a mercury rule for all plants by March 31 and make a final decision within a year.

“EPA is carefully considering what an appropriate standard should be for mercury emissions from cement kilns,” spokeswoman Cathy Milbourn said.

New York Attorney General Andrew Cuomo said the EPA “has made the right choice by going back to the drawing board and committing to adopt new hazardous air pollutant standards for cement plants that comply with the Clean Air Act.”

Jim Pew, an attorney for Earthjustice, said the agency finally appeared to be taking the matter seriously.

“Cement plants are among the worst mercury polluters in this country,” he said. “It’s encouraging that there’s been a change of heart.”

The Portland Cement Association, which represents cement manufacturers, will ask the agency to make business-friendly demands, said Andy O’Hare, vice president of the association’s regulatory affairs.

“The industry’s not doing well right now,” O’Hare said. “A good chunk of the U.S. cement production capacity is shut down because of market circumstances. We’re certainly not looking to add to our costs.”

Other states involved in the lawsuit are Connecticut, Delaware, Illinois, Maryland, Massachusetts, New Jersey and Pennsylvania.