Eastern Cosmos Cement started commercial production from yesterday.
"We have started commercial production of Tej and Purbeli brands of cement from our factory based in Hattimudha of Morang," said chief executive of Eastern Cosmos Cement Prabal Jung Pandey.
We have been manufacturing the Tej brand in our Janakpur factory since the last one decade, but due to the increasing demand for cement in the eastern region we decided to start a new factory in Biratnagar, the eastern commercial hub of the country, he added.
The cement factory, which has 60 per cent share of Cosmos Group and 40 per cent of local business people of eastern Nepal, is financed by Grand Bank, said Pandey, adding that the factory has an investment of Rs 280 million. "Though the factory has the capacity to manufacture 8,000 sacks of cement daily, it is utilising only half its capacity — due to power shortage — and producing 4,000 sacks of cement at present."
A couple of years back, when the housing sector was on a ride, many entrepreneurs had planned to establish cement factories as raw materials for cement is available in abundance in the country. The government had also promised to support the cement industry by facilitating it with access to road and electricity. However, scheduled and unscheduled power cuts have hit factories that have started production and most of them have been forced to cut down production by half.
Likewise, most of the cement factories are dependent on imported clinker despite a huge potential for raw materials in the country itself. "We are, however, planning to start clinker production at the Janakpur factory within 10 months," said Pandey, adding that the company has been planning to use mines in Udayapur's Katari and Nepaltaar to produce clinker.
According to the Cement Manufacturers’ Association of Nepal, there are 44 cement factories in the country producing around 150 brands of cement. Their transactions stand at around Rs 30 billion annually, though imports share a large market, the association said. "The current market demand for cement stands at around three million metric tonnes a year but domestic producers are supplying only about half the demand and the remaining is being fulfilled through imports from India.
Similarly, cement imports from India have doubled in the last two years. "In the first six months of the current fiscal year, the country imported Rs 4.57 billion worth cement from India," according to central bank data, that reveals that the country had imported cement worth only Rs 2.23 billion in the same period of fiscal year 2010-11.
Some other cement factories are also planning to start production — with a combined capacity of around 5,000 tonnes per day — soon and claim the country will be self-reliant, though the import has been doubled in last two years.However, domestic cement manufacturers have been mired in trouble at present, after some of them played foul and compelled Nepal Bureau of Standards and Metrology to close them down for not abiding by the set standards.