Cement firms operating on lower capacity
Owing to insufficient demand in the domestic market, cement companies are said to be operating at only 60-70 per cent of their capacity.
Speaking at an event organised by the a Cement Manufacturers' Association, Planning Commission Member BK Chaturvedi said while economic growth and with it the demand for housing, road and infrastructure sectors, may raise demand for cement, the industry also needs to improve its competitiveness.
In the last two decades, India has grown well. However, last year and the current year, there had been some slowdown. Chaturvedi suggested that something more needs to be done in order to restore the competitiveness of the companies. There is a need to be cost competitive and be able to export.
At the event, DIPP Secretary Saurabh Chandra said the unutilised capacity must be used for exports. Currently, India exports two to three per cent 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 tonne from Pakistan since 2008.
Around 10 million tonne of cement used to be exported from India per annum 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.