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Condition of Cement Industry in Nepal

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The devastating earthquake on April 2015 marks six year on the calendar this April. Since the earthquake, a total of 37 new cement industries have been registered in the country. According to the Department of Industry, there is a commitment to invest Rupees 180 billion in these industries. The registration of some of these industries have been completed while many industries are in a state of ‘wait and see’.

After the earthquake, the construction work was intensified. Therefore, investors were vying to set up a new cement industry. However, many industries had to back down immediately after the construction work failed to pick up the expected pace.

The supply of cement is almost double than the demand in the context of Nepal. According to the Nepal Cement Manufacturers Association, the demand for cement has halved due to the pandemic. Therefore, thought investors have announced for establishing industries, they are not much interested in setting up the industry.

Ongoing Projects

RMC Group had brought Palpa Cement into operation at Sisiani, Nawalparasi a year ago. They had invested Rs 7.5 billion rupees. Hongsi Holding Group, which has a large cement factory in Nawalpur, is opening another factory in Dang. The Nepal Investment Board has also approved Rs 32.50 billion investment to operate cement industry in Dang. Shankar Group, Ambe Group and C.K Golchha Group has invested about 15 billion rupees in the industry located at Karjanha Municipality of Siraha. The annual production capacity of this cement industry is 1 million metric tons. Saurya Cement is also planning to come in the market within next month.

With an investment of Rs 15 billion, Chinese company Huaxin is bringing cement industry into operation in Mahadevsthan, Dhading. The industry will produce 800,000 tons of cement and 1,095,000 tons of clinker annually. Similarly, Chaudhary Group is constructing a 600,000 metric ton capacity cement factory at Rainadevi Chhahra, Palpa.

Meanwhile, Arghakhanchi, Maruti, Samrat, Ghorahi and some other industries are expanding their capacity. At present, 64 cement industries including grinding and clinker are in operation across the country. The annual production capacity of these industries is around 20 million tons. However, only 10 million metric tons of cement was consumed in FY 075-76 while the demand decreased to 9 million metric tons. Unfortunately, the demand for cement is expected to fall further to 8 million metric tons this year due to the pandemic. As the supply exceeds the demand of cement in the market, the price for cement is also low.

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