The Hindu Business Line : Cement cos buoyed as imports from Pakistan dry up

Mumbai, Jan. 13 Cement companies heaved a sigh of relief with imports from Pakistan almost grinding to a halt after the Government imposed a countervailing duty on imports.

It also paved the way for lowering domestic cement prices by reducing excise duty by 4 per cent.

Many export orders for shipments are being cancelled as dealers in the northern markets which include Punjab, Haryana, Himachal Pradesh, Jammu and Kashmir, Delhi and Rajasthan are offering special discounts on bulk purchases.

It is no longer economical to import cement from Pakistan as levies now work out to about Rs 15-20/50-kg bag, said Mr Arvind Pal, a Ludhiana-based cement dealer.

“With recent duties, Pakistani cement price in the Indian markets has surged to Rs 225-235 from Rs 210-215 a bag, while domestic cement is available at Rs 220-230 a bag,” he added.

Frequent imports from Pakistan through roads had forced many companies to match the lower import prices despite a rise in production cost.

Mr H.M. Bangur, President of Cement Manufacturers’ Association and Managing Director of Shree Cement, said apart from price parity, builders now do not have to set aside funds in advance and wait for the shipments for a week or so.

“Dealers of Indian cement manufacturers can supply even huge quantity of quality cement with just a day’s notice,” he added.

PRICE CUTS

Amid a huge inventory build-up, cement manufacturers have cut prices in the lacklustre northern markets by Rs 10-15 a bag to revive the sagging demand.

Though the quantity of import from Pakistan has been declining since October it dropped to 70,000-80,000 tonnes in December from a high of 1.5 lakh tonnes registered in the first half of the year.

Mr Shailendra Choksi, Director, JK Lakshmi Cement, said, “The demand in the northern markets was quite encouraging at 9 per cent in December. However, in the third quarter of FY’09 it adds up to just 4.4 per cent against more than 10 per cent in the same period last year.”

Despatches up

Cement despatches in December rose 12 per cent to 16.01 million tonnes (mt) against 14.34 mt in November, while production was up 10 per cent to 15.82 mt in 14 mt in November.

Production and sales in October were almost flat at 14.76 mt and 14.30 mt when compared to November.

After the prolonged lull in the northern markets, demand in December was a big surprise, but one has to wait and see if it can sustain in the next quarter, said Mr Bangur.

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