Rising cement demand abroad set to boost exports this fiscal , India

Riding on the huge demand for cement abroad, cement exports during the current financial year are expected to exceed the 30 per cent growth it witnessed in 2003-04. The demand has also ensured that companies in the country are getting higher price realisations.

India exported 3.36Mt of cement and 5.63Mt of clinker during the year 2003-04. The exports were higher by 30 per cent than those in the year 2002-03.

The total value of cement and clinker exports during 2003-04 is around Rs1000 crore. The export prices ruled around US$23/t of clinker and US/28t of cement. Since the beginning of the current financial year export prices have been hovering at US$27-30/t of clinker and US$39-40/t of cement, sources here said.

Companies in Andhra Pradesh are said to be demanding US$2- 4 more per tonne due to higher freight costs. They export clinker and cement through the Kakinada port where the handling cost per tonne is Rs220 as compared to Rs100-125 per tonne for the companies along the western coast. Despite this price hike, importers have agreed to pay the prices quoted, it is reliably learnt.

It may be noted here that it has been close to a decade since cement companies in Andhra Pradesh have dispatched cement abroad.

Rasi Cements and Ramco together exported 4.27 lakh tonnes of clinker from Andhra Pradesh last year. Rasi also exported around 16,90 t of cement last year. There is a good potential for much higher exports from the state this as compared to the last year, sources said.

The higher export price realisations is due to a huge demand for cement or clinker building up abroad with mega projects like the Asean  highway project, sources said. The six-lane Asean project comprises 23 highways and stretches over 37,000km linking several nations. Even a country like Egypt with an installed capacity of 23Mt  had recently seen the demand-supply gap almost cease. They also pointed to a US$1bn project announced in the UK recently to upgrade the road network in that country. Added to all these is the massive reconstruction of the war-ravaged Iraq.

Industry observers here expect the total quantum of cement and clinker exports to cross 12Mt during the current financial year.

Clinker exports are mainly meant for countries like Bangladesh, Sri Lanka Singapore and Burma, while the United Arab Emirates, South Africa and Turkey are said to be importing cement.