Kathmandu: Nepal’s cement sector has seen significant growth in the last three years despite recurrent complaints from the private sector about lack of an investment-friendly climate. With a rise in domestic production, the country’s import of cement and clinker, a raw material used in the manufacture of cement, from India has dropped markedly.

According to the Trade and Export Promotion Centre (TEPC), the rate of growth in cement imports has declined in the last fiscal year. Nepal imported cement worth Rs 4.63 billion in fiscal 2010-11, representing an increment of 4.1 percent. In fiscal 2009-10, cement imports grew 6.9 percent.

Meanwhile, Nepal imported clinker worth Rs 3.90 billion during the fiscal year 2008-09, according to the TEPC statistics. In fiscal 2009-10, clinker imports surged 106 percent to Rs 8.03 billion.

However, in fiscal 2010-11, the import of clinker rose only 0.3 percent. The country imported clinker worth Rs 8.06 billion in the last fiscal year.

The decline in the rate of growth in the import of both cement and clinker reflects Nepal’s progress towards self-sufficiency in cement production. “This is a sign that Nepal has seen encouraging investment in cement producing units,” said Dhruba Thapa, vice-president of the Cement Producers’ Association of Nepal (CPAN).

CPAN’s records show that Nepal used to import Rs 18 billion worth of cement and clinker annually until five years ago. However, the total import at present has come down to around Rs 13 billion.

Thapa also said that Nepal at present was dependent on India for around 90 percent of its clinker requirement. “It will come down to 25 percent within this fiscal year.”

According to CPAN, at least five companies including Maruti Cement, Shivam Cement and Arghakhanchi Cement have recently begun operations.

Four other companies—Sonapur Cement, Bishal Cement, Ghorahi Cement and Sonapur Cement—are scheduled to come into operation within the current fiscal year. Another three—Dang Cement, Rolpa Cement and Chaukuna Cement—are at the construction stage.

So far, nine factories including Udaypur Cement, Hetauda Cement, Maruti Cement and Reliance Cement have acquired limestone quarries and some others are making similar efforts. CPAN officials said that once all these companies go into production at full capacity, they would all together produce 9,000 tons of clinker daily.

With these upcoming projects and capacity enhancement at a number of existing cement factories; the country will be able to substitute around 80 percent of its cement imports from India within two years, provided demand remains at current levels, said Pashupati Murarka, vice-president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and director of Arghakhanchi Cement.

Some industrialists and CPAN officials also cite the recession in the real estate and construction sectors in the last fiscal year for the relatively lower import of cement and clinker from India.

“As the budget announcement was delayed, it affected a majority of government and private construction projects, leading to a drop in the import of cement,” said Prabal Jung Pandey, executive director of Eastern Cosmos Cement.

source: The Kathmandu Post,31 Oct 2011