The private sector has been in a wait-and-watch mode with respect to investing in new projects, but it is not hesitating to pour money into cement factories. Almost all the leading business houses are jumping on the cement factory bandwagon.

According to the Cement Manufactures Association of Nepal (CMAN), a dozen business houses have already entered the cement production business. Earlier, most Nepali cement companies used to import clinker from India to produce cement. However, recent entrants have been establishing cement factories and limestone quarries too.

“The growing number of corporate houses getting into cement production is good news. It will make the country self-sufficient in cement,” said Dhruba Thapa, vice-president of the CMA. “What is more encouraging is that all the new projects being promoted by business houses will produce both clinker and cement.”

The Lucky Group, an emerging business house in the country, has introduced Shivam Cement under a joint venture with three houses including the Sharadha Group, Goyal Group and Maru Group. Shivam Cement began trial production in September 2011. Its plant in Hetauda went into full-fledged production in the beginning of 2012. “For now, we have been utilizing 80 percent of our total capacity,” said Satish More, chairman of the Lucky Group. The factory has a capacity to produce 1,200 tonnes of clinker and an equal amount of cement on a daily basis. More said that the group had entered the cement business as all the necessary raw materials for its production were available in the country. “Though we have sufficient raw materials for cement production, we are spending billions of rupees on importing them,” he said. “We want to stop this trend with our production.” The factory offers direct employment to more than 300 persons.

The Golchha Organization, one of the country’s leading business houses, is all set to start cement production. The organization, which has already acquired a limestone quarry in Katari, will establish the manufacturing plant in Mirchaya. The group’s vice-chairman Diwakar Golchha said that they would soon begin construction of the factory. According to him, the factory will have a production capacity of around 2,000 tonnes of cement and clinker each. “We will expand the capacity once the factory gœs into operation and will produce some 3,000 tonnes of clinker and the same amount of cement,” he said.

The KL Dugar Group, which once used to trade in cement imported from India, is now coming up with its own brand United Cement with an investment of Rs 3.5 billion. It began construction of its production plant in Dhading last month. Kumud Dugar, managing director of the group, said that the factory would go into operation within 18 months. United Cement has acquired a limestone quarry in Lele, Lalitpur. The factory, according to Dugar, will have a daily production capacity of around 1,000 tonnes of cement. “The factory will not only help fulfil the local demand for cement but also provide employment to more than 500 persons,” said Dugar. KL Dugar has ventured into cement production as there is a huge demand for cement in the country, said Dugar.

“As the country is looking for huge infrastructure development projects, demand for cement will increase in the future,” added Dugar. Meanwhile, the Chaudhary Group is working on its CG Cement Industry at Dumkibas, Nawalparasi.

Apart from these business houses diversifying into cement production, a number of established cement manufacturers have been making new investments.

Lomus House, whose main business is pharmaceuticals, is expanding its cement production unit. The group operates Cosmos Cement in Janakpur which has a capacity of producing 400 tons of cement daily. “Excited by our success in this sector, we are also setting up another plant in Biratnagar for the benefit of consumers in eastern Nepal,” said Pradeep Jung Pandey, chairman of Lomus House. He added that the plant with a daily production capacity of 300 tonnes would start production within three months. The group has injected some Rs 500 million into the project. The group also produces clinker at its Janakpur plant. “Our factory in Janakpur will produce only clinker. Its daily production capacity is 500 tonnes,” said Pandey. According to him, the group, which has injected an additional Rs 2 billion into this plant, will use its clinker produced here to produce cement at its plants in Janakpur and Biratnagar. The group has three limestone quarries in Katari, Udayapur and Sindhuli.

The Murarka Organisation, another large cement manufacturer, is investing Rs 1 billion to enhance the capacity of its Arghakhanchi Cement Factory. Once it’s done, the factory’s daily output will increase to 1,600 tonnes from 700 tonnes. “This will create employment for another 200 people,” said Pashupati Murarka, director of the organization.

source: The Kathmandu Post, 1 may 2012