Indian cement export falls by 40% in FY08 on rising local demand

Indian cement export falls by 40% in FY08 on rising local demand
Published: 07 March 2008

Cement exports from India declined by 40% in the April-January period this fiscal compared to last year due to rising domestic demand and consequent attractive realisation at home compared to export market.  
India exported 3.13Mt in the April-January period, as against 5.14Mt in the same period last year. For the same period, the export as a percentage of total domestic cement production declined from 4% last year to 2.3% this year. India produced 136Mt of cement in the given period, even as it added fresh capacity of 9Mta to take its installed capacity to 174Mta.  
"Exports are down due to better domestic demand. Manufacturers want to increase supply in the domestic market to meet the increased demand," says Grasim director DD Rathi. Grasim is a leading cement exporter. Mr Rathi says much of India’s export comprises of clinker, an intermediary product for cement. "Now cement makers are cutting the export of clinker and converting them into cement to supply to domestic market."  
An analyst with a domestic broking firm points out that the decline in cement export is also to do with newer capacities coming on stream in the Middle East. New capacities in the Middle East have made realisation for Indian cement makers a tad less attractive these days, he says. But Shree Cement managing director HM Bangur, who is also the president of Cement Manufacturers’ Association, disagrees.  
"Irrespective of realisation, no manufacturer wants to forego his share in the domestic market," he says. With robust demand keeping prices firm in the home market, manufacturers had little incentive to venture abroad.