CVD on imported cement to help domestic players
As the government has brought back the countervailing duty (CVD) on structural cement, the domestic cement industry has supported the move.
By ET Bureau |
As the government has brought back the countervailing duty (CVD) on structural cement, the domestic cement industry has supported the move.
HM Bangur, president of the Cement Manufacturers��� Association and managing director, Shree Cements told ET: ���We welcome the move as cement industry's long pending demand has been met.���
Since last April, margins of Indian cement companies were hit. This was when imported cement began coming in the country at a cheaper price. Now imported cement would attract CVD/SAD. "This will reduce the attractiveness of imported cement, said an analyst with domestic brokerage firm. The CVD today is Rs 408 per tonne while Special Additional Duty (SAD) is at 4%.
As the landed cost for imported cement increases, the low cost inferior cement from Pakistan will no longer be cheaper, Mr Bangur added. The landed cost of imported cement from Pakistan works out to around Rs 145 per bag.
In Pakistan, there is already about 7-8 million tonnes per annum (mtpa) of oversupply. Some of this is imported by India from companies like Lucky Cement and DG Khan Cement.
A few months ago, the government had subsidised imports and imports from Pakistan which ahd hit Indian companies. In a bid to increase supply in the domestic markets, exports were banned. On the other hand, duty-free imports were allowed.
All these has led to a reduction in prices by as much as Rs 10 a bag in the northern and eastern region due to demand slowdown and imports from Pakistan. Ambuja Cement managing director AL Kapur told ET recently that cement import from Pakistan has hit the domestic industry especially those in the northern markets of Punjab and Haryana.
HM Bangur, president of the Cement Manufacturers��� Association and managing director, Shree Cements told ET: ���We welcome the move as cement industry's long pending demand has been met.���
Since last April, margins of Indian cement companies were hit. This was when imported cement began coming in the country at a cheaper price. Now imported cement would attract CVD/SAD. "This will reduce the attractiveness of imported cement, said an analyst with domestic brokerage firm. The CVD today is Rs 408 per tonne while Special Additional Duty (SAD) is at 4%.
As the landed cost for imported cement increases, the low cost inferior cement from Pakistan will no longer be cheaper, Mr Bangur added. The landed cost of imported cement from Pakistan works out to around Rs 145 per bag.
In Pakistan, there is already about 7-8 million tonnes per annum (mtpa) of oversupply. Some of this is imported by India from companies like Lucky Cement and DG Khan Cement.
A few months ago, the government had subsidised imports and imports from Pakistan which ahd hit Indian companies. In a bid to increase supply in the domestic markets, exports were banned. On the other hand, duty-free imports were allowed.
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All these has led to a reduction in prices by as much as Rs 10 a bag in the northern and eastern region due to demand slowdown and imports from Pakistan. Ambuja Cement managing director AL Kapur told ET recently that cement import from Pakistan has hit the domestic industry especially those in the northern markets of Punjab and Haryana.
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