Pakistan cement export to India: Govt’s help needed to finalise deals

Pakistan cement export to India: Govt’s help needed to finalise deals
Published: 26 July 2007

Pakistan’s cement industry has been unable to get direct approval for cement export to India and has asked the federal government to take effective measures to get the deal finalised with Indian importers.

“We have properly asked the federal government to get approval from Bureau of Indian Standards (BIS) as a number of Pakistani companies have applied for it,” said Aizaz Shaikh, chairman All Pakistan Cement Manufacturers Association (APCMA). “I think that without political interference, the Indian government would not allow cement import from Pakistan.”

Pakistani cement makers are eyeing a big cement market in the neighbouring country India, as it needs more than 2.5 to 3 million tonnes cement annually.

Mr Shaikh said that almost all the cement manufacturers in Pakistan have applied for the standard certification of Pakistani cement from India to export local cement to India and BIS, which is a state-run Indian organization is not properly answering the request of Pakistani industrialists.

Pakistani cement companies are still working below their full capacity and have produced 24.2 million tonnes cement against a production capacity of 32 million tonnes. “Cement industry capacity in Pakistan would be around 40 million tonnes by the end of this fiscal year,” said Mohammad Rehan Khan, analyst at First Capital securities, a local brokerage house.

“This capacity may touch 44 million tonnes by 2008-09,” he added. “If the BIS gave permission to Pakistani cement industry to enter into the Indian market, it would be an extra benefit to Pakistani industry. Pakistani cement industrialists are looking towards UAE and other gulf countries and taking measures to enhance their export,” he added.

During the last fiscal year 2006-07, cement export of the country almost doubled from 1.5 million tonnes to 3.2 million tonnes.

Indian cement industries were exporting around eight to nine million tonnes of cement to UAE and other gulf countries, while importing cement from Bangladesh and China to meet their demand.

Local cement firms had sent a few shipments in the last quarter of the last financial year, which were withheld by the Indian customs at ports due to lack of required certification. Later these consignments were released on the guarantees furnished to the authorities by their buyers in India.

Industry sources said that local factories had enough capacity to ship 8-10,000 tonnes of cement a day to India. Pakistani cement makers have set price of Rs 240 per 50 kg bag while local price of cement are Rs 190 to Rs 210.