Cement export to India faces delay

Cement export to India faces delay
Published: 10 July 2007

Cement exports to India by Pakistani manufacturers are not likely to resume anytime soon because the Bureau of Indian Standards (BIS) has not completed its certification process, industry sources told Daily Times.

The Managing Director of a leading cement company said that nothing was certain as yet about the resumption of cement export to India because BIS officials were yet to visit plants here. BIS has the authority to certify the quality of cement to be sold in India, whether domestically manufactured or imported.

“They might visit cement plants here in the next month. They have given different dates to different firms. Even if things move as expected and there is no further delay, export would begin only in late August or the beginning of September,” he said.

Cement manufacturers are ready to begin export to India with full vigour as soon as the Indian authorities clear the samples of their cement. Local firms have received a large number of inquiries from across the border, but they are unable to make any commitment because of the certification issues. India is facing an acute shortage of cement due to a surge in construction activities and huge spending on infrastructure development by the Indian government.

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.

An executive at a local firm said that local factories had enough capacity to ship 8-10,000 tonnes of cement a day to India. The domestic producers charge around Indian Rs 240 per 50 kg bag as against Indian Rs 170 that is the landed cost of cement imported from Pakistan. Even if another 30 Indian Rupees is added as transportation cost, Pakistani cement will be available for 200 Indian Rupees.

With India in the midst of an infrastructure boom, including the real estate sector, the demand for cement has grown manifolds. The government has done away with the countervailing duty of 16 per cent and an additional duty of 4 per cent on cement imports to meet the demand for cement.

The cement industry in Pakistan has a surplus capacity of 10-12Mt. It has boosted its capacity from 22 million tonnes to 34 million tonnes during the last one and a half years.

The Indian Cement Manufacturers Association has already protested their government’s decision to allow imports and have termed it against fair business practices as domestic production attracts Rs 400 and Rs 600 per tonne as excise duty whereas imported cements does not. It remains to be seen if the Indian manufacturers’ lobby would be strong enough to get the government’s decision reversed.