Pak looks to make India top cement market

Following relaxation of cement imports, Pakistan is planning to export six million tonnes of the commodity to India annually. This means India will replace Afghanistan as Pakistan's top cement export market.

In the last few weeks, Pakistan has exported about 25,000 tonnes of cement to India. Six million tonnes is roughly 4 per cent of the Indian cement production (155 million tonnes).

"We have a surplus of 12-13 million tonnes since our demand is 25 million tonnes and the capacity is 38 million tonnes. We are exporting through sea and rail routes. Export by road should be allowed so that we are able to step up supplies," said Shahzad Ahmed, secretary, All Pakistan Cement Manufacturers' Association (APCMA).

Since September, Pakistan has exported 25,111 tonnes of cement (9,886 tonnes by rail and the rest by sea) to India. The average price of cement that entered India through wagons is $72 (Rs 2,880) per tonne or Rs 144 per 50 kg bag, while the price of cement that came in through sea was $68 (Rs 2,720) per tonne or Rs 136 per 50 kg bag, according to Ahmed.

This is significantly cheaper than Rs 235-250 per 50 kg bag in India. The cement industry in Pakistan is expected to expand its capacity to 40 million tonnes over the next two years.

"We can easily export 0.5 million tonnes per month and 6 million tonnes annually to India," said Tariq Sayed Saigol, chairman, Maple Leaf Cement and former APCMA chairman. The company, along with Lucky Cement and DG Khan Cement, is a major exporter of the produce.

Industry players in India, however, see no major impact of cheaper imports. "Since imports from Pakistan are being done mainly by bulk users like real estate players, I do not see any major impact on our prices in the coming months," said OP Puranmalka, group executive president and chief marketing officer (Cement Business), Aditya Birla Group.

In April this year, the government had scrapped the 16 per cent countervailing duty on cement imports.

It also withdrew the 4 per cent special additional customs duty. It did not announce any duty on cement imports in January. These measures have rendered cement imports duty free.