Cement manufacturers have often complained that there is excess capacity in the industry. But that has not stopped any of them from expanding capacity on a regular basis. Neither have retail cement prices dropped though almost all the cement companies operate only at two-third of their installed capacity.
Chennai-based India Cements is now looking at exports. Replying to an NDTV question on whether import of cement from countries like Bangladesh or Pakistan is a worry to Indian manufacturers, N. Srinivasan, vice-chairman of the company, said it’s not something they are taking too seriously. Mr Srinivasan added that India Cements was looking to export, albeit in small quantities.
Rakesh Singh, director, marketing and strategy, India Cements, said that Sri Lanka and African countries are the possible export markets to begin with. Mr Singh added that price in Sri Lanka is around 850 Sri Lankan rupees per bag, and the price in South Africa is around $110 per tonne. The average selling price of one bag in Chennai is around Rs 340.
Mr Singh said that there are certain entry barriers like meeting the quality and requirement conditions of the target markets. The companies that have enquired from these markets may visit the plants to authorize exports. Though the company hopes to start exports from this fiscal, the quantities will be small in the beginning and seeing the response, exports will be increased. This to an extent the company hopes will increase the current capacity utilization levels of 67%.
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