Cement sector may look at exports to remain competitive: DIPP

The industry is looking at exporting the unutilised building material

Reeling under below utilisation of the existing 350 million tonnes per annum (mtpa) capacity, the cement industry may look at exporting the building material to remain competitive, a top government official today said.

 

"Capacity utilisation remains a concern. It is finally a reflection of competitiveness. Why can't the unutilised capacity be used for exports?," DIPP Secretary Saurabh Chandra said at a Cement Manufacturers' Association's event here.

 

India, the world's second largest cement manufacturer, produces just about 60-70% of the existing capacity leaving a large part of the installed capacity idle for want of demand.

 

Planning Commission member B K Chaturvedi, who was also present on the occasion, said while economic growth and with it the demand for housing, road and infrastructure sectors, may spruce up demand for cement, the industry also needs to improve its competitiveness.

 

"India has grown well in last two decades. However, last year and the current year, there had been some slowdown... The capacity utilisation of cement industry has been around 70%. In case, it has to be completive, something more needs to be done," Chaturvedi said.

 

"We have to be cost competitive and be able to export," he added.

 

Currently, India exports two to 3% of its production and that is mainly in the form of clinker, an input for cement making, to neighbouring countries. The country also imported around 50,000 tonnes from Pakistan since 2008.

 

India used to export around 10 million tonnes a year to countries like Indonesia, UAE, Nepal and Bangladesh. Now, some of these companies have set up their own grinding units. Nepal has increased customs duty, leaving Indian exports unviable.

 

A CMA official said some relief from high taxation by the government would help the industry to increase exports.