India to export cement via Pak body

Pakistani companies are finding it difficult to cope with the rising demand of cement

The Cement Manufacturers' Association (CMA), an apex body representing most of the domestic manufacturers, has agreed to export cement to Pakistan through the Pakistan Cement Association (PCA), and not directly.

The CMA and the PCA met in Pakistan recently to discuss the threat of Indian cement companies finding increased presence in the Pakistani markets.

R G Bagla, the group president of JK Cement, who attended the meeting said, "Pakistani companies are finding it difficult to cope with the rising demand and also the threat from the Indian firms finding new grounds there.

The PCA had invited us to discuss and find a solution to the problem."

"It was decided that henceforth cement from Indian companies will enter Pakistan only after receiving a nod from the PCA. Now, we will not provide cement directly to the suppliers," Bagla added.

The CMA comprises most of the major domestic cement players including Ambuja, Sanghi, UltraTech, Birla and JK Cement.

In a CMA committee meeting, it was decided that the prices of cement would be hiked by Rs 3 shortly and then by Rs 10 this week, some senior cement industry officials.

The increase in diesel and petrol prices was taken into account before deciding the hike, sources said.

While the cement price in Delhi is about Rs 190 a bag as per the company billing price, it is about Rs 205 a bag in the retail market.

As per the CMA decision, the prices were already hiked by Rs 3 on Friday, sources said.

Domestically, a major quantity of cement is produced in Gujarat, and as per the CMA decision, the price in Ahmedabad has increased to Rs 178 a bag, from Rs 175.

"However, there are many who, in a bid to earn more, are demanding higher than the decided prices," one of the officials said.

There is an increasing demand, and people are willing to buy even if the rates rise by a further Rs 10-15, another felt.

Following the Supreme Court ruling against overloading, the retail prices of cement in Ahmedabad have shot up to about Rs 175 a bag, from about Rs 125, in the past two months.

Places like Surat and Vadodara witnessed a hike of Rs 200 a bag as they are farther from cement companies, which are mainly based in Saurashtra. The retail prices of Ambuja and Sanghi cement are in the range of Rs 170-175 a bag and, for bulk buying, they are at Rs 155-162 a bag.

UltraTech and Hathi are commanding Rs 2 less per bag in Ahmedabad, one of the officials said.

The increase in freight rates has affected the cement industry. The transporters benefited by 23-25 per cent owing to the ban.

However, the cement industry has not gained anything from it.

To compensate the losses, cement prices have been increased, sources said.