The country’s cement requirement has soared with increasing construction of dams, bridges and housing projects. Cement companies have reported that sales have surged 10-15 percent year on year.

The sharp increase in demand has encouraged many companies to diversify into cement manufacturing while existing factories have been enhancing their production capacity. 

According to the Nepal Cement Manufacturers’ Association, there are around 44 cement plants in the country. Around 12 of them have their own clinker production units.

Tara Pokharel, general secretary of the association, said that the overall industry had been growing at around 10 percent annually. “If you look at the overall capacity of the cement industry, demand can be fulfilled by domestic production. But

some big projects have been importing cement and domestic products account for 85 percent of the total consumption in the country,” he said.

The Chaudhary Group, which manufactures various FMCG and consumer electronic items, has opened a cement factory with a daily capacity of 1,200 tonnes with the aim of tapping rising demand and substituting imports.

“As the country is seeing a surge in infrastructure activities in recent months, demand for cement also started rising. So the company has also entered the cement manufacturing segment,” said Madhusudan Paudel, general manager of corporate communication, public relation at the Chaudhary Group.

“We hope that infrastructure activities will expand in the country with political stability, and that means more cement will be needed.” The company has recently launched CG OPC and PPC with starting prices of Rs 620 and Rs 540 per bag respectively in the domestic market. “The company has started distributing cement all over the country, and the market response is quite good,” Paudel added. 

Meanwhile, Jagdamba Cement, one of the largest cement manufacturers in the country, said that demand for its products had risen around 17 percent compared to last year. It operates two plants in Bhairahawa

and Birgunj having capacities of 1,200 tonnes and 1,000 tonnes daily. They produce OPC, PPC and PSC types of cement .

Ramesh Thapa, senior sales manager of Jagdamba Cement, said that they had been getting orders mainly for OPC which is used to make a wide range of buildings and projects. Jagdamba sells OPC at Rs 620 and PPC and PSC at Rs 540 per bag.

Many cement factories have also started operating their own clinker plants leading to a decrease in imports of this basic raw material. “We have our own clinker factory which processes red clay and limestone,” said NK Shah, deputy general manager of technical at Udaypur Cement, a government-owned entity. The company produces OPC which costs Rs 640 per bag.

Similarly, Maruti Cement, which makes OPC that sells for Rs 630 per bag, has its own clinker factory. It has been doing brisk business since it started operations five years ago. “We have been seeing a growth of 10-15 percent yearly,” said Durga Chudel, sales manager of Maruti Cement. He added that demand had been rising from construction projects like dams, bridges and factories.

The lure of the cement sector can be gauged by the entrance of Nigerian cement major Dangote into the Nepal market with an investment of US$ 800 million. After receiving the go-ahead from the Nepal Investment Board, it has been scouting for possible locations to build its factory.

source: the kathmandu post,20 jan 2014