Construction industry expects to bounce backThe construction industry has been eagerly waiting for the expected post-quake building boom to materialize and transform its fortunes.
The construction industry has been eagerly waiting for the expected post-quake building boom to materialize and transform its fortunes.
Speaking at a roundtable organised by Kantipur Publications, captains of the building sector said that after political stability takes hold and the reconstruction programme goes into full swing, the industry would be able to realize its full growth potential after witnessing a disastrous year due to the double whammy of an earthquake and trade embargo.
Industry leaders said that their production capacity had been slashed by an energy crisis and shipments of building materials had been hit by transport syndicates after the Indian blockade. They said that the earthquake, though unfortunate, had opened up huge opportunities for construction businesses but delays in reconstruction works had limited their growth potential.
Industrialists said that demand for construction materials like bricks, steel and iron rods, galvanised sheets, cement, paint and other products had been projected to swell by 20 to 30 percent in the upcoming years.
“The annual requirement of cement stands at 4.5 million tonnes and it is expected to increase by 20 percent if issues like frequent disruptions in production and supply and increases in the cost of raw materials are addressed effectively,” said Dhruba Thapa, president of the Nepal Cement Manufacturers’ Association.
Industrialists doubt that cement factories will be able to fulfil rising requirements as they are regularly crippled by energy shortages and political instability. They also pointed out that transportation cartels were likely to jack up freight charges. “Our sales have increased since February as the eastern and western parts of the country are seeing an increase in the construction of development infrastructure and houses,” said Ujjwal Kumar Shrestha, executive director of the Panchakanya Group. “In spite of high demand, we face difficulties in meeting growth projections as recurring supply disruptions and energy crises have affected total production.”
Meanwhile, paint manufacturers were most optimistic about the future as they see an expanding market for paints and lower cost of production as paint factories use less energy.
“The paint business will see a 20 percent increase in the upcoming years. More than 800,000 homes were destroyed by the earthquake, and even if only 10 percent of them were painted, the turnover of the paint business will be around Rs16 billion which is a normal turnover over three years,” said Shaibal Gosh, country manager of Berger Paints Nepal.