" Demand up but domestic plants running below capacity "
Cement import from India has surged exponentially this fiscal, as domestic production was insufficient to cater to the local demand.Import of cement has doubled in the first 10 months of this fiscal to Rs 16.02 billion compared to Rs 7.99 billion in the corresponding period of the last fiscal.

The worth of cement import in the first 10 months of 2014-15 stood at Rs 8.4 billion, according to Nepal Rastra Bank.

The figures are at odds with the claims made by domestic manufacturers that the country is gradually moving towards self-reliance in cement production.

Cement import has surged this fiscal as the capacity utilisation of most cement plants has declined.

As per cement manufacturers, cement plants with their own clinker producing facility have utilised around 70 to 75 per cent of their capacity and those that import clinker have utilised 60 per cent of their capacity.

“The capacity underutilisation of cement plants is due to hassles in importing clinker, coal and other necessary raw materials,”
explained Bishnu Neupane, chairman of Saurah Group.

At the same time, Nepal Electricity Authority has also reduced electricity supply to cement plants, lament manufacturers. Lack of coal to run the plants during load-shedding hours affected the manufacturing units.

Manufactures say around 120,000 tonnes of coal imported by cement plants has long been stranded at Kolkata port due to shortage of rail rakes. Bulk cargoes like coal are ferried in open wagons. The cement plants that do not have their own clinker production facility have also reported facing similar challenges in importing clinker.

While local cement producers expected the demand to go up, they claim it skyrocketed after the trade disruptions on the border ended last year.

“Along with post-quake reconstruction works, the pace of government-run development projects has also gone up and there is increased demand also because of road widening drive, which has partially demolished many houses that were built flouting the rules. All these resulted in creating a bigger-than-expected demand for cement,” said Neupane.

According to Cement Manufacturers Association of Nepal, of the total 48 cement factories in operation, 14 with their own clinker production plants have cement production capacity of eight million metric tonnes, or around 160 million sacks per annum.

However, the demand is expected to hover around 190 million sacks in the current fiscal.

The government has also been supporting the manufacturers’ initiative to make the country self-reliant in cement production, as the government has borne the cost of access road from factory to mine and has ensured electricity grid connection facility.

Manufacturers say the country could be self-reliant in clinker within two years if the hassles identified in developing mines are addressed. There are hassles in getting approval from the Ministry of Forest and concerned line agencies to develop mines and get right-of-way clearance for access road to the factories.

Cement manufacturers that are self-reliant in clinker could play a pivotal role in making the country self-reliant in cement, according to CMAN.

source:the himalayan times,14 june 2017