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Quality, pricing to determine success of river sand import bid

Quality, pricing to determine success of river sand import bid

The ink has dried. The call made. But the success of the government’s decision to allow import of river sand from countries like Malaysia, Cambodia and Vietnam will depend on the quality of product and the competitive prices with which it is marketed. Kerala had imported seven to eight shiploads of river sand in 2013 from Cambodia to tide over the shortage in the construction sector. At that time, companies like Raja Steel and Chennai-based firms like Sun and Sand and Titanic India Ltd were among the companies which imported the sand. Currently, the market price of river sand ranges between $12 and $ 24 for one tonne at Kochi port depending on the quality and the size of the granules.

“Back then, the Customs insisted on plant quarantine certificate, which hampered the movement of the sand from the port,” said K V Sandeep, director of Aaron Shipping, Kochi, who was involved in the import process.“Now there is no such problem with a plant quarantine fee being charged apart from customs duty. The plant quarantine fee was Rs 1,800 per tonne and an additional Rs 2 for every additional tonnage.”  Managing director of the Coimbatore-based Raja Steels, D Raja, said they had imported 30,000 tonnes of river sand from Cambodia.

“The insistence of a plant quarantine certificate led to the delay in removing the sand from the Kochi port for seven months. However, we moved the High Court and the Supreme Court and obtained a favourable order,” he said.They argued there was no organic matter in the sand as it was river sand and not soil sand, and, hence, there was no need for a plant quarantine certificate, he said. “Since the quality of sand met the stipulated standards, it was cleared in no time. However, I feel it will be difficult to import sand from countries like Malaysia and Indonesia as the prices will not be competitive. We are willing to import sand and sell it to customers at Rs 2,400 to Rs 2,500 per tonne if there were enough orders.”

Elucidating the pricing mechanism, Sandeep said, “If we purchase river sand from Cambodia for $ 22 per tonne and provide for customs duty, Mining and Geology permits, plant quarantine fee, one-month storage charges and vessel discharge amount, we can sell it in Kerala for Rs 2,350 to Rs 2,400 per tonne.” 
The state will need around 50 to 60 million tonnes of sand by 2020 but many of the commercial customers will be satisfied with the cheaper M Sand, he said.

Asked about the huge investments made by M Sand unit promoters in Kerala to set up units and secure environmental clearances and whether the decision to import river sand will affect their prospects, Madhavan of Five Star Metals, who has set up large units in Kerala and Karnataka, said they could deliver M Sand at Rs 950 per tonne within a 30-km radius in cities like Thrissur and Ernakulam. In Palakkad, he said, it was lesser at Rs 650 per tonne.  


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