Sales in India are looking up for Danish equipment supplier FLSmidth, which was hit hard by the global credit crunch (sales plummeted and shares fell nearly seventy-three percent in value). FLSmidth has been dealing in India for over a century and the country is currently its biggest market as well as being its biggest center of employees. At a press conference earlier this month, CEO Joergen Rasmussen said, “In India there’s a boom in cement and most of our customers are very aggressive on expanding capacity. We’re estimating 10 percent growth in cement consumption in India, which is double the global rate.”
The growth in Indian demand is due to the plans of infrastructure improvement the local government has put in place. The Indian government plans to spend at least $1 trillion on infrastructure improvement between 2012 and 2017 in order economic growth and subsequent poverty reduction. FLSmidth already one contracts to install 9.45 million tons of cement capacity in 2009. This amount totaled to twenty-one percent of the global expansion outside of China. The 2009 performance in India stands in stark contrast to FLSmidth’s sales performance in other markets in recent years which saw the Danish giant fall to the number 2 slot behind Chinese competitor Sinoma in the global market outside China. India sales in 2009 allowed FLSmidth to regain the position of world’s largest kiln producer by a slim margin while the cement equipment market in the rest of the world remained relatively cool.
“FLSmidth contracted all new cement capacity in India during 2009 and can well be considered as the incumbent. It will be difficult to maintain that kind of track record going forward, but India will remain a key market and priority,” said Frederik Meinertsen, a Copenhagen analyst. Other analysts consider it a realistic notion that FLSmidth might again make a clean sweep in India in 2010. It now only remains to be seen how the Danish company fares against its rival Sinoma in the rest of the world as the global recovery slowly gains momentum.