Cement supply from Pak hits infra hurdle

More than three-fourths of Pakistan's cement manufacturing capacity is in its northern areas and Wagah provides the most economical way of exporting the commodity to India.

Bestway Cement, part of the UK-based Bestway Group, is probably the first company from Pakistan not to take fresh orders. In a letter (of which Business Standard has a copy) to the commerce secretary, Zameer Choudrey, group chief executive, Bestway, said, "Because of logistical problems, we are unable to deliver the cement to them (Indian importers) and hence we stopped taking new orders over a month ago".

According to cement importers, the problem is being faced by all Pakistani exporters. DG Khan Cement, Maple Leave Cement, Fecto Cement, Pioneer Cement and Pakistan Cement are other Pakistan-based companies that export cement to India via the land route.

The exporters said their orders were pending due to limited railway interchanges at Attari (near Amritsar) and lack of parking facilities on the Indian side of the border for Pakistani trucks.

For instance, in case of Bestway, which prefers the rail route, the pending orders amount to 50,000 tonnes. There is only one interchange per day in which the company can despatch a maximum of 300 tonnes. The exporters want the number of interchanges to be increased to thrice a day.

Punjab-based cement importers and Pakistani cement companies said it was now more than a year since both the governments agreed to open the land route. "There has not been any progress on the ground," said Choudrey.

At a time the Indian government is trying to double cement imports from Pakistan, such infrastructure bottlenecks could create hurdles. On an average, India imports 100,000 tonnes per month (from Pakistan), which is minuscule against its monthly requirement of 14-15 million tonnes (mt).

According to a report of the working group on the domestic cement industry for the 11th Five-Year Plan (2007-12), India should have had an installed capacity of 199 mt by March 2008. However, the present capacity is only around 175 mt.

ROADBLOCKS

Inadequate parking facilities for unloading cement at Wagah border

Less railway interchange at Attari leading to pending orders

India imports around 100,000 tonnes of cement in a month

Bestway Cement (Pakistan-based) already stopped taking fresh orders

Other players may follow suit

Domestic industry falling behind targets set by Working Group on Cement Industry (2007-12)