At
a time when the Indian local market is growing at a slow pace and there is
overcapacity, The Chennai based India Cements Ltd is looking at the
possibilities of exports to Sri Lanka & South African countries. However,
the firm says the quantum of exports would be marginal and would not offset the
Indian market slowdown.
Mr.
N Srinivasan, Vice Chairman and Mnaging Director, India Cements Ltd said, “We
are looking at exports to countries like Sri Lanka & South Africa. Of
course, there are challenges, but exports are feasible now”
The
firm is expected to start exports probably to Sri Lanka first this fiscal
(2012-13). .
There
are issues like higher cost of logistics & internal transport of
consignments from the existing factories to the ports, which need to be
addressed. Further, the firm also has to meet the entry barriers in these
countries, especially in the African countries, before starting exports.
In
countries like Sri Lanka, the firm would look at quality of the product as a
competitive edge, compared with the existing cements imported into these
countries.
The
Sri Lankan local price of cement per packet (50 Kg) is about Rs. 850 in Sri
Lankan currency, which is equivalent to Rs. 356 (Indian currency), while in
Chennai, the price of Indian Cements' brand is Rs. 340 a packet. The company
would have to factor in the logistics price also for exports.
The
capacity utilisation for the company is currently about 67%. Though there is
little growth in demand, overall it is slow. The company is hoping an increase
in volume at a later stage.
The
India Cements, which owns the IPL (Indian Premier League) team Chennai Super
Kings, received revenues of about Rs. 122 crore from the IPL for the quarter.
Last fiscal, the total revenue from IPL was about Rs. 137 crore.
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