Following the impact from the introduction of Goods and Services Tax (GST) in July 2017, Penden Cement Authority Limited’s (PCAL) cement export is gradually picking up the pace.
In February and March 2017, PCAL exported 23,981 metric tonnes (MT) worth Nu 111.36 million (M) and 23,847MT of cement worth Nu 115.06M respectively.
The plant faced a problem with the gearbox in April last year and that is when the production and export both dropped.
When the GST was introduced in July, Penden just exported 3,076MT of cement worth Nu 15.36M in 2017.
However, the export picked up, its export soared up to 20,253MT worth Nu 98.97M in December 2017.
The export business in the last two months this year is also good considering the season.
PCAL exported 19,644MT of cement worth Nu 98.18M in February and 18,579MT worth Nu 90.80M in January.
PCAL managing director, Kaylzang Tshering, said the company had to reduce the ex-factory price to make it competitive with the Indian brands and the profit margin was adversely affected.
“We took a cut in profit to make it competitive and compatible with the Indian market,” he said.
PCAL’s head with sales and marketing, Tashi Drukpa, said the company had suffered a drop between April and September 2017.
“We also couldn’t export,” he said, adding that whatever was produced were floated in the domestic market that had increased at that time.
At present, PCAL cement is going at an average price of Nu 5,100 per MT.
Tashi Drukpa said the price should increase from April this year, as the market would rise up.
Of the total export chunk, 90 percent is exported to Bengal, while remaining five percent each goes to Sikkim and Assam. PCAL keeps 50 percent each for export and domestic market.
Kaylzang Tshering said the full impact of GST is yet to be analysed. “Application and implementation are different across India.”
Rajesh Rai | Gomtu