Financial Daily from THE HINDU group of publications
Friday, Nov 11, 2005
Industry & Economy
Strong chances for cement exports to Pak: Guj Ambuja
`Getting enquiries from US too'
Mumbai , Nov. 10
NATURAL disasters in the recent past might open up unlikely international markets for cement exports from India.
There is a strong possibility that India might export cement to Pakistan post the earthquake that hit northern Pakistan recently, said Mr Anil Singhvi, Executive Director, Gujarat Ambuja Cements Ltd.
And surprisingly, some stray enquiries have been coming in from the US too following the Katrina disaster there, he said.
Cement manufacturers here have been sounded out by their counterparts in Pakistan about the possibility of exports to that country, he said.
There is a shortage of cement in Pakistan and the commodity is priced at one-and-a-half times to twice the Indian prices currently. The demand there could be between 1-2 million tonnes, according to industry experts.
However, any export plan has to be cleared with the Ministry of External Affairs and the Home Ministry here.
Exports by rail might not be possible if the cement is to be loaded off Indian Railway wagons and on to railway wagons from Pakistan. It would be more viable if it could be transported all the way by road across the Wagah border, said Mr Singhvi.
"With respect to the US, the industry has already started getting enquiries to export to the US on f.o.b. basis (this means the buyer will foot the transportation charges)," said Mr Singhvi.
Freight charges to the US are prohibitively high, but with cement prices starting to hit $90 per tonne there, exports from such a faraway place as India might not be an impossibility, he said.
China, which produces 40 per cent of the world's cement, is a big consumer of cement itself that it has not much surplus to export.
In addition, Chinese cement is not of a very good quality, say cement industry exports. Mexico is currently in an anti-dumping dispute with the US over its cement exports to the latter.
Other markets such as South-East Asia have their own demand for cement post the tsunami. India is being seen as stand-by possibility perhaps, in case prices shoot up so much that freight charges do not seem ridiculous in comparison, said the experts.
Although the last quarter has not been good for Indian cement exports on account of the floods here, export realisations are much better than domestic realisations, yielding Rs 500 more per tonne. Among the cement majors, the large exporters are Gujarat Ambuja and UltraTech Cement. Exports are currently mostly to West Asia.
The next two to three years offer very good export possibilities for Indian cement players, said Mr Singhvi.
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