Nepal sector affected by slowdown

Nepal sector affected by slowdown
Published: 21 January 2011

Nepal is having to import around 40 per cent of cement requirements to meet domestic demand.

"Some 29 already established big cement industries with installed capacity of around 12,700tpd can supply only around 60 per cent of the demand," said Jayandra Chudal, executive director of the Bishal Cement. Bishal Cement is a Rs 500-million close-circuit plant planning to start production by this April.

Last year, when the country witnessed a construction boom, cement industry emerged as a new investment avenue. The Central Bureau of Statistics has predicted an increase in the contribution of construction sector to 6.62 per cent to the gross domestic product (GDP) in the last fiscal year, compared to a fiscal year ago, due to increase in construction materials, government and private sector construction activities.

"However, there is a slowdown this year," he said, adding that the companies are now producing half of their installed capacity due to slowdown in the construction business.

"If all the companies that are under construction come into operation, the total production capacity will reach above 16,000tpd, excluding the industries that have 100t and less capacity," Chudal said.

Of the 29, seven are mine-based cement industries, including government owned Hetauda Cement and Udayapur Cement, and others include Maruti Cement, Butwal Cement, Supreme Cement, and Dynasty Cement that have Integrated Unit (IU).