The cement industry in Nepal has excellent chances of flourishing in the domestic as well as international arena, as the country's topo graphy is endowed with large and small deposits of good grade limestone. According to stakeholders, about 1,250 million tonnes of cement grade limestone is believed to exist in the country, out of which the existence of at least 224 million tonnes has been confirmed through drilling and surveys.

However, Engineer Purushottam Shrestha, coordinator of Jagdamba Cement, says, “Despite the abundance of raw material and prospects of growth, domestic cement production only fulfils 65 to 70 per cent of total cement consumption in Nepal.“ According to him, the rest of the 35 to 40 per cent of cement demand is fulfiled by Indian cement companies. He adds, “The Nepali cement market contains OPC, PPC and PSC cement, out of which OPC is most preferred these days.

Irrespective of quantity of limestone mines in Nepal, we still have to import certain raw materials from India, as extraction in Nepal is highly expensive.“

Shrestha informs that a feasibility study done about two years ago indicated that the demand for cement in the domestic market was 13,600 tonnes per day. He says, “But the total production in Nepal is about 11,595 tonnes per day, out of which grinded cement accounts for 8,595 tonnes per day.Clinker and cement accounts for remaining 3,020 tonnes per day.Jagdamba itself supplies around 15 per cent of this quantity, by producing 1,800 tonnes per day.“

Agreeing with Shrestha, Jagannath Dahal, brand manager of Jagdamba Cement, says that the rest of the demand is fulfiled by Indian imports. “It is not that we cannot supply the entire demand, but government policies, re policies, resource extraction cost and electricity problems make it difficult to increase production.“ According to Dahal, despite categorisation of OPC cement into 53, 43 and 33 grade, the government is yet to formulate clear cut policies about their marking. “The truth is that 33 grade cement, as stipulated by international regulations, is almost non-existent in the market. Moreover, Indian cement undergoes a longer process from production to use, due to transportation from factory to site delivery. Nepali cement has the upper hand in this, as our products are much fresher, making us better market contenders.“

Despite the private sector's growing interest in the cement industry, they complain that the state is unable to provide even minimal facilities to the sector.Dahal says, “Indian brands like Prism, Jaypee cement, et cetera are quite popular, but Nepali cement brands are equally competitive when it comes to quality -as they perfectly meet the guidelines of Nepali and Indian standards.“

Meanwhile, Amit Shrestha, brand manager of Brij Cement, considers that the slumbering realty sector has negatively affected related sectors like the cement industry. According to him, the major reason behind this is the lack of adequate formulation and implementation of government policies. He opines, “For any industry to flourish, the government's attitude should be industry friendly.

It is not that we cannot be self sustainable, we even have prospects for surplus production that could lead to export, but slack policies and the real estate have also brought us down.“According to Shrestha, the industry has reached a bottle neck, with the market being saturated. He says, “Around five years . ago, 70 per cent of the cement f market depended on imports, while domestic products ac counted for only 30 per cent of t the supply. Currently, we have re versed the situation by supplying around 70 per cent of the market demand. However, power cuts, strikes and unfriendly policies are not only lowering our morale but also dragging down growth.“

Despite limestone being the most extracted mineral in Nepal and its vast capacity of producing good quality cement, the country's cement industry is slowing down due to cost of mining, short sighted policies and unfriendly industry environment.

source: The Himalayan Times(2012),28 Jan 2012