Ambuja Cements, UltraTech to scale up cement exports

Written by Smita Joshi Saha | Mumbai, Jul 30 | Updated: Jul 31 2008, 06:00am hrs
Ambuja Cement Ltd, Indias second largest cement producer and UltraTech Cement Ltd, an Aditya Birla Group Company, have plans to increase cement exports taking the advantage of the growing demand and booming construction sector in the Middle East.

AL Kapur, MD, Ambuja Cement Ltd said, For the current year, I should be able to achieve my target of exporting 0.8 million tonne and if possible, more, depending on the availability of ships. Next year, we are targeting to export around one million tonne.

Similarly, UltraTech has also decided to export surplus cement after fulfilling the domestic demand. There is good demand in the Middle East, prices are also good and many construction activities are also coming up. We have planned to export about two million tonne of cement by this year end. However, whether we can accomplish this will depend on the volumes, said KC Birla, president and CFO of UltraTech.

With the concern over rising inflation, the government in April, had banned exports of cement and clinker, taking into consideration the rising mismatch between demand and supply of the commodity. From April 2007 to February 2008 cement exports were 3.3 million tonne and clinker exports were about 2.1 million tonne. UltraTech and Ambuja Cement are the two largest cement exporters from Gujarat.

According to experts, with the over supply situation approaching, cement majors will have no option but to export the surplus. Also, it will act as a hedge when the prices start correcting due to oversupply.

The export ban of more than a month had impacted us. It took us another 30 days to reorganise our shipping department. There is enough demand in the export market and the prices are very good. The huge export demand will help us out from the current problem, Kapur said.

Ambuja Cement last year exported about 1.32 million tonne of cement amounting to Rs 277 crore. On the other hand, around 10% UltraTechs revenues are generated from exports. Ambuja Cement shares on Wednesday were up 3.14% to close at Rs 82.05 and UltraTech shares were up 1.47% to close at Rs 556.65 on the Bombay Stock Exchange.