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MFN to bolster cement exports to India
KARACHI: Pakistan, with a vast potential to meet Indias cement demand of construction sector, is likely to enhance its exports manifold to the neighbouring country with the award of Most Favoured Nation (MFN) status, analysts said.
The local cement manufacturers believe that India is a place where they can offload huge surplus production of the commodity as their supplies are restricted against productions. Pakistan cement manufacturers have a combined installed capacity of around 44 million tonnes whereas cement demand stands at around 31 million tonnes including 30 percent exports and 70 percent local consumption, leaving around 10 million tonnes of surplus capacity.
Average prices in Pakistan are hovering around Rs 417 per 50 kilogrammes (kg) bag in the northern while Rs 401 per 50-kg bag in the southern region.
Pakistan has already exported bulk of cement to Afghanistan but India has so far received only a tiny chunk of it.
As compared to Pakistan, India has an altogether opposite supply-demand situation. The cement industry in India has been facing certain challenges to bridge its local demand despite of roughly 300 small and 130 large plants with an installed capacity of around 234 million tonnes. Indias aggregate production capacity of these plants is around 167 million tonnes. There has been an acute shortage of cement in the Indian market that takes around 15 days for delivery of cement bags on cash basis.
This is also fuelling the delays in projects and construction schedules in the country and forcing the government to import cement from other countries.
Indian cement prices stand at almost 280 rupees per 50-kg bag but if cement is imported from Pakistan, the landed cost of such import is lower than almost 235 rupees per 50-kg bag or at 16 percent discount. Local cement manufacturers are exporting cement to India through trains only. Therefore, only a limited quantity of cement could be exported to India. If India allows cement imports through Wagah border, it would be more beneficial for the players in the northern region like DG Khan, Lucky, Maple Leaf Cement, Gharibwal Cement Ltd, Bestway Cement Ltd and Pioneer Cement Ltd as they would face lower transportation cost with improved export margins. The cement exports to India through Gujarat port would benefit southern cement players, as their location is nearer to the sea port.
Daily Times - Leading News Resource of Pakistan
KARACHI: Pakistan, with a vast potential to meet Indias cement demand of construction sector, is likely to enhance its exports manifold to the neighbouring country with the award of Most Favoured Nation (MFN) status, analysts said.
The local cement manufacturers believe that India is a place where they can offload huge surplus production of the commodity as their supplies are restricted against productions. Pakistan cement manufacturers have a combined installed capacity of around 44 million tonnes whereas cement demand stands at around 31 million tonnes including 30 percent exports and 70 percent local consumption, leaving around 10 million tonnes of surplus capacity.
Average prices in Pakistan are hovering around Rs 417 per 50 kilogrammes (kg) bag in the northern while Rs 401 per 50-kg bag in the southern region.
Pakistan has already exported bulk of cement to Afghanistan but India has so far received only a tiny chunk of it.
As compared to Pakistan, India has an altogether opposite supply-demand situation. The cement industry in India has been facing certain challenges to bridge its local demand despite of roughly 300 small and 130 large plants with an installed capacity of around 234 million tonnes. Indias aggregate production capacity of these plants is around 167 million tonnes. There has been an acute shortage of cement in the Indian market that takes around 15 days for delivery of cement bags on cash basis.
This is also fuelling the delays in projects and construction schedules in the country and forcing the government to import cement from other countries.
Indian cement prices stand at almost 280 rupees per 50-kg bag but if cement is imported from Pakistan, the landed cost of such import is lower than almost 235 rupees per 50-kg bag or at 16 percent discount. Local cement manufacturers are exporting cement to India through trains only. Therefore, only a limited quantity of cement could be exported to India. If India allows cement imports through Wagah border, it would be more beneficial for the players in the northern region like DG Khan, Lucky, Maple Leaf Cement, Gharibwal Cement Ltd, Bestway Cement Ltd and Pioneer Cement Ltd as they would face lower transportation cost with improved export margins. The cement exports to India through Gujarat port would benefit southern cement players, as their location is nearer to the sea port.
Daily Times - Leading News Resource of Pakistan
