India Cements explores export opportunities

India Cements is looking at the possibility of resuming exports in a bid to improve capacity utilisation and benefit from the falling rupee, N Srinivasan, Vice-Chairman and Managing Director of the company, has indicated.

Addressing shareholders at the company’s AGM last week, Mr Srinivasan said the cement producer was taking all the necessary measures at an operational level to improve results for the remainder of FY14.

MR Srinivasan stated that cement producer is hoping to restart exporting, stating: “With the [Indian] rupee depreciation, there is a possibility of exports and we are looking at some exports to improve our capacity utilisation and hopefully exports will start again.” Last year, the company had said it was looking to export to Sri Lanka and South Africa, but volumes were expected to be marginal.

On the domestic front, as the current fiscal enters the half-way mark, he said the company expects a revival in demand in the last two quarters of the year, driven by rural markets and government spending on infrastructure.

Last year the company’s output rose by five per cent, a performance which was hindered by the power situation in the state of Andhra Pradesh, Mr Srinivasan noted. The company has set up captive power of plants in Tamil Nadu and Andhra Pradesh, each with a capacity of 50MW. It has created capacity to generate 160 to 170MW of power, which will meet 80 per cent of its requirements.

Capacity additions in the south of India have also eased which is likely to boost utilisation rates for producers in the region. India Cements currently operates at a rate of around 70 per cent.