Ban goes but cement exports to see a dip: experts

Written by Smita Joshi Saha | Mumbai, May 30 | Updated: Jun 1 2008, 02:55am hrs
Despite the government lifting ban on cement export and allowing it via Gujarat ports, experts believe the move will not have any significant impact. In fact, cement export this year is likely to see a marginal dip as compared to last year.

Cement players, requesting anonymity, revealed, New capacities have come up in the Middle East, the biggest market for exports from India. Hence, the demand-supply gap there is met internally. Also, during the 45-day ban on exports in the country, Indian exporters have lost a few clients, the advantage being taken by Pakistan cement manufacturers. All this will result in a dip in exports this year.

Indian companies exported 3.3 million tonne of cement during financial year 2008, and Gujarat accounted for 90 % of the total exports. KC Birla, CFO, UltraTech Cement Ltd said, Our exports revenue will come down this year as we will be focusing more on the domestic market. However, the export ban will have an impact in the long-term.

Around 10% of UltraTech revenues were generated from exports. UltraTech and Ambuja Cements Ltd were among the major exporters impacted significantly due to the ban.

I dont see any significant rise in exports on account of the ban being lifted. The demand for the commodity and realisation are better in India than exports, said Hitesh Agrawal, research head, Angel Broking.

Morgan Stanley Research, in a report, said, Exports constitute a meager 2.2% of the total cement production in India, thus resulting in little impact on our demand-supply model from this development. We expect cement prices to fall on the back of aggressive capacity addition plans of the sector.