India's cement and clinker exports fell 11 per cent to 3.14 MT in the year ended March 2000 from 3.51 MT in 1998-99. Exports to Bangladesh dropped from 534,000 tonne in the year ended March 1999 to 528,000 thousand tonne in year ended March 2000.

"India is already facing competition from China which is eating into its share of exports. One of the reasons for a drop in exports to Bangladesh was cheaper Chinese cement. With Lafarge entering the market, our exports would drop further," said an official from a leading Indian cement company. China has five times more capacity to produce cement than does India. In 1998, China produced 530 MT compared to the 87.20 MT that India produced in the same year. Lafarge plans to transport limestone after mining it in Meghalaya to Bangladesh through a 17-km long conveyer belt. Lafarge is also planning to set up a 1.2 MT cement plant in Bangladesh where this limestone would be processed into cement. "Security issues would need to be addressed before the proposed conveyer belt is laid as the export would be done across international borders," said an official from an Indian company. Despite repeated attempts, Lafarge officials were unavailable for comment. Lafarge, a $11 billion French cement major, has formed a jointventure with an Indian company called Lafarge Surma Cements Ltd for the mining of limestone in Meghalaya. The joint venture is with a local company Lum Mawshum Minerals Private Ltd.

Lafarge has a 74 per cent stake in the company. Mineral rights are with the local company which are yet to be transferred to the JV company. Lafarge is to set up a greenfield unit in Meghalaya with a capacity of 2 MT which will later be increased to 5 MT. Total estimated investment for the project is Rs 200 crore with Rs 90 crore being the outlay for phase 1.

According to estimates, annual royalties would be around Rs 9 crore to the Meghalaya government. Forex earnings would be to the tune of Rs 44 crore annually. Land would be provided on lease for 100 per cent sales tax exemption for 7 years and excise duty exemption for 10 years.