The Hindu Business Line : Cement export ban may hit imports from Pakistan

Construction boom
Pakistan’s exports registered 139 pc growth to 5.1 mt with the rising construction boom in West Asia, India and African countries.
Government wants to facilitate more imports to temper rising prices

Suresh P. Iyengar

Mumbai, April 17 The ban on cement exports may have an adverse impact on imports, especially from Pakistan.

With Indian exports banned, Pakistan will have more opportunity to tap the lucrative and logistically well-connected West Asian markets compared to India, said Mr Arvind Gupta, Managing Director, Arya Enterprises, a Mumbai-based importer.

“Pakistan exports cement to the UAE at $70-75 a tonne f.o.b. (free on board), while for us it is priced at $65 a tonne,” he added.

“The real impact of the ban may be on imports, increased supply in India and lower supply to West Asia may result in Pakistani exporters re-routing despatches there,” said Mr Anand Agarwal, research analyst, Credit Suisse.

West Asian countries, especially Dubai, were one of the major importers of cement to feed the fast growing construction sector. The UAE recently removed the five per cent custom duty on cement imports.

Dubai’s cement imports in 2007 increased 73.6 per cent to 2.96 million tonnes (1.704 million tonnes), according to the Dubai World’s Statistics Department. China was top exporter to Dubai with 1.9 mt followed by India 5.53 lakh tonnes (lt) and Pakistan 2.55 lt, it said.

Costly imports

Though cement imports from Pakistan are just picking up, analysts feel that it may become costlier. India imported about 4.57 lt from Pakistan till March 2008. The shipments became more profitable after the duty waiver in September.

According to the All Pakistan Cement Manufacturer Association (APCMA), the cement exports registered 139 per cent growth to 5.1 mt with the rising construction boom in West Asia, India and African countries.

However, the Government wants to facilitate more imports to temper rising prices.

Mr G.K. Pillai, Commerce Secretary, was recently on record that cement imports from Pakistan will be increased to 4,000 tonnes a day to meet the demand-supply mismatch.

Cement companies exported about 3.3 mt of mostly clinker in fiscal 2008 to West Asia and African countries. Ambuja Cements and UltraTech together account for about 58 per cent of the total exports.

The Gujarat-based Sanghi Cement exports about 33 per cent of its sales, while Saurashtra Cement chips in with 24 per cent of its sales.

For calendar year, Ambuja Cements’ has contracted export of 0.6 mt, less than half of what it did last year.

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