Domestic cement output continues to grow steadilyNepal’s domestic cement production has been growing steadily over the past few years as the demand for cement continues to rise. Currently, there are 53 cement factories operating in the country that produce 160 million sacks of cement annually.
Nepal’s domestic cement production has been growing steadily over the past few years as the demand for cement continues to rise. Currently, there are 53 cement factories operating in the country that produce 160 million sacks of cement annually.
According to Dhurba Thapa, president of Cement Manufacturer Association Nepal, cement factories in Nepal have been producing 8.5 million tonnes of cement annually.
Domestic production fulfills 70 percent of the market demand while the remaining 30 percent is fulfilled through imports.
The association revealed that Rs125 billion has been invested into the domestic cement industry.
As the country pushes forward with infrastructure development projects such as the building of road networks, hydropower projects and the rise in the construction of houses and apartments in urban areas, the demand for cement has swelled significantly.
Cement manufacturers claim that the Nepali cement market is growing by 10 to 15 percent every year.Nepal is moving towards import substitution in cement production as the import has been decreasing year after year. The import of cement has been declining in the past few years. According to import data from the Trade and Promotion Centre (TEPC), Nepal imported cement worth Rs1.03 billion in the fiscal year 2017-18 compared to Rs1.14 billion in the previous fiscal year.
Though Nepal is looking to be self-reliant in cement production, the export of cement is still not possible due to high production costs, said the association. Similarly, the price of cement is competitive in neighbouring countries compared to the price in Nepal.
Meanwhile, the import of clinker—an essential raw material for the cement industry—has been increasing. The import data of TEPC shows that Nepal imported clinker worth Rs30.21 billion in the fiscal year 2017-18 compared to Rs24.96 billion in the previous fiscal year 2016-17.
The association said that while the import of clinker has increased due to high production demands, they expect the country to be self-reliant on clinker production from next year.
Similarly, two new cement factories that are under construction will come into operation soon, he said. Other domestic cement factories are also expanding their production capacity. Nepali cement producers are producing OPC, PPC and PSC cement, of which OPC is widely used by consumers. Similarly, the cement industry in Nepal provides jobs to 25,000 people.
Jagdamba Cement has been producing 1.2 million tonnes of cement annually from its two plants, said Sunil Paudel, senior manager at Jagdamba Cement. The company produces OPC, PPC and PSC cement. The company buys clinker from domestic producers and also imports from India. The company holds a 15 percent market share in the domestic cement sector. According to him, the company plans to expand its production capacity and is in the process of setting up a cement factory in in Nawalparasi.
The company plans to manufacture 120,000 sacks of cement per day after expanding its production capacity. Similarly, the company also plans to establish its own clinker production unit in the future.
Similarly, Hongshi Shivam Cement, a Nepal-China joint venture company, has already started production. Established with an investment of $359.2 million, the company plans to double its output to 12,000 tonnes daily in the next two years.