South India cement industry should explore export opportunities:ICI

New Delhi : One of the leading players in the Indian financial services space, believes that an increase in exports will be the key for south India’s cement industry’s volume growth in the medium term, given the dwindling demand in the domestic market.

"The south region’s export volume was a mere 0.1 million ton in FY11 despite a capacity surplus of 30 mtpa. Demand in the south is declining and there is poor visibility of an improvement in the near term,"

"The current demand-supply situation in south India region mirrors the conditions in Turkey during 2006-2009. To allay the negative impact of stagnant domestic consumption, Turkey’s cement industry increased export volumes from 8 million tons in 2007 to 18 million tons in 2009 (key export markets too were experiencing an unfavourable demand-supply situation for producers) and is the world’s largest cement exporter now,"

Ports in south India are increasing handling capacities (Krishnapatnam port handled 16 million tons in FY11 against a target of 35 million tons, and capacity will increase to 45 million tons in by next year). We believe that an increase in exports will be the key for south India’s cement industry’s volume growth in the medium term, given the dwindling demand in the domestic market.