By Muhammad Najeeb, IANS
Islamabad : Bilateral trade between India and Pakistan has taken a significant step forward with at least five Pakistani companies approved by the Bureau of Indian Standards (BIS) starting to export cement to India while five more manufacturers have applied for certification.
“A total of 11 cement companies have been cleared by the BIS and four more have applied to get approval for export,” Shahzad Ahmed, secretary of All Pakistan Cement Manufacturers Association (APCMA), told IANS.
He said five companies have started export of cement through the sea and rail routes. Ahmed added that at present no company is sending cement by road, though both governments in Pakistan and India have given approval for it.
“But according to the bilateral agreement between two governments, only a truck of ten tonnes can cross the border, which is not viable in case of cement,” Ahmed said, adding that they have requested the governments to allow trucks that can carry more.
At present Pakistan produces about 100,000 tonnes of cement and 40,000 tonnes of it is in excess of local consumption.
“We have surplus cement which we need to export and our factories have more production capacity,” said Ahmed.
“Cement industry capacity in Pakistan would be around 40 million tonnes by the end of this fiscal year,” said Saeed Khan, analyst at First Capital Securities, a local brokerage house.
“This capacity may touch 44 million tonnes by 2008-09,” he added. “If the BIS gave permission to more Pakistani cement companies to enter the Indian market, it would be an extra benefit to Pakistani industry.
“Pakistani cement makers are looking towards the United Arab Emirates and other Gulf countries and taking measures to enhance their export,” he added.
“Our cement is cheaper than Indian cement whereas quality is much better,” Saifuddin Khan, general manager marketing of Lucky Cement, told IANS.
He said his company was the first one to be certified by BIS and “we were the first to send a consignment to India in September last year”.
He said presently his company was sending consignments through sea but would start through rail after production starts at their second plant located in North West Frontier Province (NWFP).
He said at present Lucky Cement alone was sending 40,000 tonnes cement to India per month.
“We believe there is great demand for cement and importers would continue to prefer Pakistani cement, being close to their country and because of competitive rates,” Khan said.
Lucky also plans to issue global depository receipts to raise funds for expansion plans. It aims to raise its cement manufacturing capacity by 2.5 million tonnes per annum by building two additional production lines in Karachi.
When contacted, a spokesman for the Commerce Ministry said it was an agreement between Indian and Pakistani businessmen and the government was not involved in it.
“But we are available for any help needed by the exporters… It is encouraging to see that our exporters have signed these agreements with their Indian counterparts,” the spokesman told IANS.
The idea of cement export from Pakistan surfaced during a meeting between Prime Minister Manmohan Singh and Pakistan’s former prime minister Shaukat Aziz in 2005.
Pakistani exporters were encouraged by the Indian’s government steps to abolish countervailing duty and additional customs duty, making imports viable.