09-24-2009, 05:11 AM
By Tanveer Ahmed
KARACHI: The cement industry is seeking alternative markets for export after exports to India have been curtailed by almost 80 percent in the recent months.
Cement manufacturers have started exploring other markets and a leading manufacturer has sent consignments to Sri Lanka, South Africa, Namibia, Oman and Mauritius.
There are also companies that are searching European markets and it would a major development given that fact that the primary export market Afghanistan would remain stagnant whereas cement exporters would eye UAE market for the second best market for the exports in the years to come.
According to a report on cement sector, prepared by Standard Capital Securities, any growth in cement dispatches may arise from revival of growth cycle from regional countries.
However, cement exports are expected to slowdown by the end of FY10. The prospect of export slowdown would go even further in medium-term as demand of the commodity may curtail wherein regional player Iran may try to take a better share in the overall pie. On the other hand, exports to India are declining constantly and it is expected that Indian avenue to shutdown completely once their own expansions to come online by Feb 2010.
Report mentioned that all the regional countries viz. India and Iran will be self sufficient to meet their own market needs wherein Chinese are gearing up to park excess supply into export markets swiftly and hence avenues for Pakistan would likely to be limited.
Besides, leading European companies are planning to park their excess capacity in this region as demand in Europe and the United States has also tapered-off due to slowdown in construction activities. This will probably result in a tough competition for Pakistani cement manufacturers in months to come and global cement prices will also come under pressure in the wake of a price war between the cement suppliers from different countries.
An important factor pointed out in the report is Indonesian factor that can hit the industry badly. Pakistani producers rely on Indonesian coal given shorter sea route distance as against South Africa and Australia.
This year PT Perusahaan Listrik Negara the Indonesian state owned electricity firm has announced expansion plan wherein the usage of coal is likely to increase from 50 million tonnes per year to 90 million tonnes.
This may hurt Indonesian export of coal and demand may be diverted to other countries. By 2010, Indonesia expects to add 10,000MW of new power generating capacity, which would be requiring an extra 32 million tonnes coal usage with incremental 4 million tonnes consumption every year.
Hence, higher demand of coal albeit bad weather forecast might amplify coal prices in the international market as the Indonesian coal index ICI has an influence to sway prices.
About the future outlook on local cement industry in the midst of rampant raw material prices and lingering issues between industry players v/s government agency viz. Competition Commission of Pakistan which has actually broken cement price build-up by imposing punitive measures against hidden cartel, report pointed out that in the long run survival of the industry depends upon government spending on water courses, canals, drainages and housing projects announced under Public Sector Development Programme.
http://www.dailytimes.com.pk/default.asp...2009_pg5_5
KARACHI: The cement industry is seeking alternative markets for export after exports to India have been curtailed by almost 80 percent in the recent months.
Cement manufacturers have started exploring other markets and a leading manufacturer has sent consignments to Sri Lanka, South Africa, Namibia, Oman and Mauritius.
There are also companies that are searching European markets and it would a major development given that fact that the primary export market Afghanistan would remain stagnant whereas cement exporters would eye UAE market for the second best market for the exports in the years to come.
According to a report on cement sector, prepared by Standard Capital Securities, any growth in cement dispatches may arise from revival of growth cycle from regional countries.
However, cement exports are expected to slowdown by the end of FY10. The prospect of export slowdown would go even further in medium-term as demand of the commodity may curtail wherein regional player Iran may try to take a better share in the overall pie. On the other hand, exports to India are declining constantly and it is expected that Indian avenue to shutdown completely once their own expansions to come online by Feb 2010.
Report mentioned that all the regional countries viz. India and Iran will be self sufficient to meet their own market needs wherein Chinese are gearing up to park excess supply into export markets swiftly and hence avenues for Pakistan would likely to be limited.
Besides, leading European companies are planning to park their excess capacity in this region as demand in Europe and the United States has also tapered-off due to slowdown in construction activities. This will probably result in a tough competition for Pakistani cement manufacturers in months to come and global cement prices will also come under pressure in the wake of a price war between the cement suppliers from different countries.
An important factor pointed out in the report is Indonesian factor that can hit the industry badly. Pakistani producers rely on Indonesian coal given shorter sea route distance as against South Africa and Australia.
This year PT Perusahaan Listrik Negara the Indonesian state owned electricity firm has announced expansion plan wherein the usage of coal is likely to increase from 50 million tonnes per year to 90 million tonnes.
This may hurt Indonesian export of coal and demand may be diverted to other countries. By 2010, Indonesia expects to add 10,000MW of new power generating capacity, which would be requiring an extra 32 million tonnes coal usage with incremental 4 million tonnes consumption every year.
Hence, higher demand of coal albeit bad weather forecast might amplify coal prices in the international market as the Indonesian coal index ICI has an influence to sway prices.
About the future outlook on local cement industry in the midst of rampant raw material prices and lingering issues between industry players v/s government agency viz. Competition Commission of Pakistan which has actually broken cement price build-up by imposing punitive measures against hidden cartel, report pointed out that in the long run survival of the industry depends upon government spending on water courses, canals, drainages and housing projects announced under Public Sector Development Programme.
http://www.dailytimes.com.pk/default.asp...2009_pg5_5