Cement exports surge on Gulf construction boom, India

Cement exports surge on Gulf construction boom, India
Published: 10 October 2005

The construction boom in the Gulf region has pushed cement exports from India to a new high of 0.5Mt in August ’05. Industry officials said that cement exports from India have shown a growth of 60.7 per cent to 0.5Mt compared to 0.3Mt exported during the same period last year. 

Cement makers like Ultratech exported 1,26,319t of cement in August while Gujarat Ambuja’s exports touched 1,13,042t. ACC exported 2,477t in August. 

Robust oil prices have propelled the construction sector in the Middle East with a number of projects involving real estate, oil & gas and infrastructure development coming up. The Dubai Municipality figures show that as many as 103 commercial buildings were constructed in the first quarter of ’05 alone. "Be it real estate, industries, oil and gas, infrastructure, in every segment of the construction market in the Gulf is witnessing a boom. Logistically it is also convenient for us to tap that market," Jayesh Doshi, vice president, Gujarat Ambuja Cement said. 

An analyst with Motilal Oswal Securities said: "The domestic cement capacities in Middle East are not enough to cater to the needs of the region." He said that the trend is likely to continue into the next year because huge cement capacities are coming up in the Gulf countries. However, clinker, which is a semi-finished form of cement and has been in demand in a number of oversees countries, lost its charm in August due to sluggish demand. 

According to the figures released by the Cement Manufactures Association of India (CMAI), clinker exports declined by 31.8% to 0.3Mt in August ’05 from 0.4Mt recorded in August ’04. During the past year, in volume terms, clinker exports had shown a sharp growth over the past couple of years, overtaking cement exports altogether. 

CMAI figures show that cement production and sales, which had slowed down marginally in July, picked up pace in August again. This year, even the monsoon did not have much impact due to the booming infrastructure and housing industry, which resulted into continuous rise in demand. 

India Cements recorded the highest growth in production and sales during the month of August followed by Grasim-Ultratech combined, Gujarat Ambuja and ACC.