Mumbai: Call it cementing of ties.
Cement made by Pakistan-based Lucky Cement Ltd and Maple Leaf Cement Factory Ltd could land in India within a month’s time, if the samples from these factories pass tests required to get ISI certification.
If successful, this would also be the first attempt by foreign cement manufactures to compete with local cement in retail and wholesale markets.
Mint on 16 May had reported that nearly a dozen foreign cement makers had applied to the Bureau of Indian Standards (BIS) to get an ISI certification, without which cement cannot be sold in India, the world’s largest cement market.
“Our officials visited the units (plants) of Lucky Cement and Maple Leaf on 13 and 14 July and have got the samples for testing. The results of testing should be out in the next 20 days, after which the certificates will be processed,” said P.K. Batra, head (central marks department-1), BIS.
But “things are moving slow. Government should hasten the process of getting ISI certification considering the cement shortage the Indian market is facing,” says Mohammad Abid Ganatra, director of finance at Lucky Cement, in a telephone interview. Lucky has a total capacity of 6.5 million tonnes per annum (mtpa), and was the largest exporter of cement in Pakistan for 2006-07. Pakistan has an exportable surplus of 8-10mtpa of cement, according to analysts.
Lucky has so far been exporting cement to East African countries, Gulf Cooperation Council countries and Sri Lanka. “All big builders and developers in India, including DLF, have enquired with us,” claims Ganatra.
The move to bring in imported cement isn’t threatening domestic cement manufacturers, given local prices.
Says R.P. Singh, executive director of Sanghi Cement, a Kutch, Gujarat-based cement manufacturer: “Imports from Pakistan would hardly have any impact on the offtake of domestic cement. The impact on pricing is going to be marginal and not substantial. Pakistani cement will face issues with respect to Indian quality specifications and a logistics constraint. Most of the major ports are crowded and demurrage on cement can offset any gains on account of cheaper prices of imported cement.”
Sanghi Cement sells around 170,000 tonnes of cement in the domestic market and 130,000 tonnes overseas. “Then there is the issue of your sales network, warehousing, point of sale and branding. People in India have come to live with their local brands for years,” adds Singh.
V.K. Sharma, director, Anagram Securities, says India can expect five million tonnes of imported cement from Pakistan to come to states such as Gujarat and Rajasthan this year. “However, the imported cement would not be much cheaper in most regions except Mumbai, where the price is ruling above Rs255 per 50kg bag. The government may be trying to put pressure on cement manufacturers by extending BIS certification to Pakistan units,” says Sharma.