Arghakhanchi Cement plans to spend Rs4.13 billion to double its production capacity of cement and clinker by 2017, allowing it to substitute Rs10 billion worth of clinker imported from India annually, the company said.

Arghakhanchi Cement’s plant located in Rupandehi has a capacity to produce 1,000 tonnes of cement and 1,200 tonnes of clinker daily. It plans to more

than double the output of both products to 3,000 tonnes daily.

The factory is spread over 20 bighas of land.

“We have targeted becoming the largest factory in Nepal in terms of investment and output capacity by October 2017,” said Rajesh Agrawal, managing director of the company.

The Siddhartha, Murarka and Kedia industrial groups hold respectively 35 percent, 30 percent and 17.5 percent stakes in the company. The remaining 17.5 percent of the shares are owned by an Indian company Uma Cement.

The promoters first acquired Dynasty Cement, renamed it as Arghakhanchi Cement, and expanded its capacity with an investment of Rs3 billion. The company has injected another Rs4.13 billion into its expansion plan. Of the total outlay, bank loans amount to Rs2.89 billion. Investors will put up the rest of the money.

Agrawal said that they had signed an agreement with FLSmidth of Sweden to supply vertical roller mill equipment costing Rs1 billion to produce more high-quality products. “We will be self-sufficient in clinker in two years, and we will be able to supply it to all the cement plants in Nepal,” said Agrawal. “Nepal has been importing 50 percent of its clinker requirement from India.” He add that the country’s clinker import bill totalled more than Rs16 billion annually.  

Nepal’s cement requirement has soared as it has embarked on a construction spree with dams, bridges and housing projects coming up across the country. Cement companies have reported that sales have been swelling by 10-15 percent annually. The sharp increase in demand has encouraged many companies to diversify into cement manufacturing even as the existing factories have been enhancing production capacity.