Freight rates hamper cement exports

The surge in shipping freight rates has hindered the exports of cement and clinker from the country. Cement producers would have exported much more but for the rise in freight rates.

About 6.9 million tonne of cement and clinker was exported from India in the financial year 2002-03 and domestic cement makers were looking at a considerable rise in exports in this year.

A cement industry analyst said, "In the last six months export realisations in dollar terms have gone up by about 2 0 per cent. This should have definitely made cement and clinker exports more attractive for local producers. However, an acute jump in shipping freight rates has curbed the expected rise to some extent."

A senior L&T executive said, "We would have liked to export more to South Europe, where we currently have some presence, but a sharp increase in shipping freight rates in the last few months has prevented this."

L&T has an installed capacity of 17 million tonne and exports around 2.7 million tonne of cement and clinker annually. It services the markets in Middle East and South Europe.

However, the cement and clinker company's exports have been on the rise, at 1.43 million tonne during the first half of the current fiscal.

Meanwhile, Gujarat Ambuja's exports of 6.9 lakh tonnes of cement between July and November has not been impacted greatly since its sale is through freight-on-board (FOB)basis.

A senior executive at Gujarat Ambuja said, "We haven't faced problems with rising freight as we sell on FOB basis." The cement major caters to markets in the Indian sub-continent, Africa and Middle East.

Industry sources said the rise in cement exports has also been affected due to unavailability of vessels in some cases.