Nepal | March 28, 2020

Cement industries reduce production citing shortage of raw materials

Himalayan News Service

Members of the Kaski District Market Monitoring Committee check weight of a cement sack at a hardware shop during an inspection in Pokhara, on Tuesday, February 7, 2017. Photo: Rishi Ram Baral

Kathmandu, May 12

Cement producers have slashed their production significantly due to low supply of raw materials from India.

Owing to reduced supply of clinker and coal — two of the major raw materials for cement — from India, domestic cement manufacturers have also cut their production by as much as 40 per cent of their normal production capacity.

“Cement industries have witnessed a severe clinker shortage since last few weeks after the supply from India started falling drastically,” said Tara Pokharel, general secretary of Cement Manufacturers Association of Nepal, adding that almost every cement industry in the country has cut their output in recent days.

As per manufacturers, more than 35 per cent of the demand of clinker in Nepal’s cement industry is met through Indian import. However, Indian traders have been cutting down supply of clinker to Nepal citing lack of railway racks (containers) that are used for its transport.

“Following shortage of such railway racks in India itself, Indian traders are cutting down the number of railway racks previously used to supply clinkers to Nepal. As a result, Nepali cement industries, which do not have their own clinker production plant and rely on Indian supply, have been largely affected,” added Pokharel.

There are two types of cement industries in Nepal — those that manufacture required clinker for cement production themselves and the ones that rely on Indian clinkers and supply from domestic clinker producers.

Out of the 54 cement industries in Nepal, more than two dozen cement industries have their own clinker
production plant.

However, cement producers said that even the manufacturers that are self-reliant on clinker have also cut down their clinker production due to crunch of coal. “Along with clinker, supply of coal has also been halted from India due to lack of enough railway racks,” informed Pokharel.

In this regard, the cement manufacturers have urged Indian traders to increase supply of clinker and coal to Nepal and believe that the crunch in the domestic cement industry will be addressed soon.

In the meantime, manufacturers have already jacked up price of cement in the domestic market citing the crunch of clinker and coal. They have hiked up the price of Ordinary Portland Cement (OPC) and Portland Pozzolana Cement (PPC) by up to Rs 100 per sack.

As there is no state mechanism to fix price of cement, manufacturers have been increasing price of cement arbitrarily.

A week ago, Industry Minister Nabindra Raj Joshi had appealed the cement manufacturers to roll back the price hike. However, manufacturers have been saying that they were compelled to hike cement price due to lack of raw materials.

A version of this article appears in print on May 13, 2017 of The Himalayan Times.

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