According to the Department of Customs, Nepal imported 649,244t of clinker and 586,294t of cement in the current fiscal year, an increase of 10 per cent and 85.4 per cent respectively from the previous fiscal year.
There has been a decline in cement prices in recent months due to a decrease in demand. But the price is expected to go up as soon as demand shoots up as India has recently increased excise duty on cement to two per cent. The duty change will increase the prices in India and ultimately in Nepal as the latter is highly dependent on India for clinker and cement.
Two of the six mine-based cement industries in the country – Hetauda Cement Industries and Udayapur Cement Industries – are state-owned with a capacity of 1550tpd. The remaining industries are privately-owned with a combined production capacity of 1550tpd.
Unfortunately, the government-owned companies produce only 40-50 per cent of their total capacity and privately owned industries produce only 50-90 per cent of the total capacity because of production lags like strikes, lack of power and obstruction in supply of other raw materials.
The Department of Mine and Geology has permitted companies to operate 26 mines across the country, according to Krishna Dev Jha, senior divisional metallurgical engineer at Department of Mines and Geology (DMG). Of them, four companies - Butwal Cement, Sagarmatha Cement, Dang Cement and Bhardau Cement – are busy constructing their own clinker manufacturing plants, according to Jha. Other companies like Ghorahi Cements are scheduled to start production by July, 2011.
The total production capacity of the new companies would be approximately 3850tpd, which is about 1,155,000tpa. If these companies operate to their full capacity, they would meet 46.2 per cent of the annual demand in the country.