Kathmandu, June 1:

Cement price in the local market has started cooling down due to increasing production after India lifted ban on exports of clinker two weeks ago. The price of — the major construction material — cement, has dropped by about Rs 50 to Rs 60, nine to 10 per cent per 50-kg bag.

“The factory price of cement has now dropped to Rs 525 per sack this week from Rs 575,” said Dhruba Thapa, vice-president of Nepal Cement Industry Association (NCIA).

According to him, most of the industries, out of the total 30, have now started operation

that were earlier closed or suspended after India imposed ban on exports of raw materials needed for cement including clinker and gypsum on April 11.

However, India lifted ban on exports of cement and clinker to Nepal on May 22 in response

to the government’s request. However, India has still banned exports to other countries.

Following the Indian restrictions on exports of raw materials, the price of cement had braced an upswing in Nepal.

Expensive cement had emerged as a major setback for the construction industry that has seen a boom over the past one-and-a-half year.

The construction entrepreneurs even had halted construction projects in the eastern Nepal, while construction works at the country’s largest irrigation project — Sikta Irrigation Project — were suspended for a while.

The Federation of Contractors’ Associations of Nepal (FCAN) had also asked the government to review the rates of construction works, undergoing.

It had also hit consumers hard who were building their homes by borrowing money from the bank. Cement costs occupy a weight of about one-third in the overall construction cost. The cement prices had gone up by 78 per cent up to Rs 660 per 50-kg bag in the domestic market, compared to Rs 420 in mid-July 2007.

Nepal relies on Indian imports for some 70 per cent of its total requirements of raw materials for cement. Last year, Nepal brought in 0.8 million tonnes of clinkers and one million tonnes of cement from India.

Thapa said that the demand of cement is rising by an average 10 per cent every year, which is expected to grow by over 15 per cent this year.

There are 30 cement factories in Nepal. However, only five like Udayapur Cement and Hetauda Cement utilise domestic limestone to produce clinker and the finished products.

The rest — over two dozen industries — depend on clinker imported from India or overseas for their production. They import ready-clinker, pulverise it and sell it packing with a ‘Made in Nepal’ logo.

Despite abundent raw materials needed for cement factory in Nepal, the businessmen find it easy to import ready-clinker to earn easy and quick money.