Bishal Cement starts commercial operation

Rupandehi-based Bishal Cement started commercial operations — after three weeks of trial production — from yesterday.
"The company that has an installed capacity of 400 tonnes of production daily, has provided direct employment to more than 150 people, including skilled and semi-skilled employees,” said executive director of Bishal Cement Jayandra Chudal.
The 11th cement factory in the Bhairahawa-Lumbini corridor, Bishal Cement is a Rs 500-million close-circuit plant that uses domestic clinker to produce cement but imports other raw materials like gypsum and fly ash from India, Pakistan and Bhutan.
The company has a capacity of producing 300 tonnes of Ordinary Portland
Cement (OPC) and some 400 tonnes of Precast Prestressed Concrete (PPC) daily. Portland cement is the most common type of cement used and it is a basic ingredient for concrete, mortar, stucco and most non-specialty grout.
"However, Bishal Cement will currently manufacture around 70 per cent PPC and 30 per cent OPC daily, and increase production according to market demand,” he said, adding that the company will double its production capacity in six months.
Lately, the construction boom — mainly due to housing and hydropower — in the country, has prompted industrialists to open cement factories. Due to the growing demand, the country has to import around 40 per cent cement to meet domestic market demand.
"The 29 already established big cement companies with an installed capacity of around 12,700 tonnes per day can supply only around 60 per cent of the demand," according to Chudal.
The Central Bureau of Statistics projected an increase in the contribution of the construction sector to the gross domestic product (GDP) to 2.97 per cent in the last fiscal year as compared to a year back.
However, cement factories have been operating at half their installed capacity due to the slowdown in the construction business and power crisis lately.
If all the companies that are under construction, come into operation the total cement production capacity will reach above 16,000 tonnes per day, excluding the factories that have 100 tonnes and less capacity," said Chudal.
Of the 29 cement companies, seven are mine-based, including the government-owned Hetauda Cement and Udayapur Cement, and others have Integrated Unit too.
Some new factories which are under construction are also mine-based that use limestone mines to produce clinker for cement. Due to more mine-based companies, the contribution of mines to the GDP is also predicted to increase by 5.03 per cent in the last fiscal year from a fiscal year ago.
Though the government had promised to accord higher priority to complete road construction and extension of electricity transmission lines to facilitate the establishment of cement companies, Arghakhanchi Cement's mine at Narpani was forced to close down for the past eight months leading to a shutdown of the cement factory that was established 12 years back with an investment of Rs 2.5 billion.

Government panel recommends divestment of seven state-owned institutions

A government panel has suggested the government to sell seven state-run loss making institutions.
The panel — formed to ‘Review Government Budget Management and Spending System' — presenting a final draft of its recommendation suggested the government to divest its shares from Hetauda Cement Factory, Janakpur Cigeratte Factory, Udayapur Cement Factory, Nepal Aushadhi Ltd, Grameen Awash Company, Nepal Awas Bikas Bitta Company and Nepal Bank Ltd.
The state-owned institutions are operating under losses due to leakage, financial indispline, and lack of professional management due to confusion over their goal on whether they are commercial or social entities, the report added.
The first commercial bank is also suggested to divest. Despite being the oldest and one of the largest banks, it is still under the control of central bank.
Similarly, once the profit making Hetauda Cement Factory, Udayapur Cement Factory and Janakpur Cigeratte Factory — that is currently at a loss of over Rs 530 million including Rs 500 million overdrafts and Rs 30 million interests — are also suggested for divestment as their financial health is deteriorating.
Finance Ministry has tried to revive the Nepal Aushadhi Ltd (NAL). However, the sale of medicines produced by NAL continuously dropped and plunged by more than 60 per cent in the past four years. Its annual turnover dropped to Rs 20.6 million during fiscal year 2008-09 from Rs 50.3 million recorded in 2005-06. It has overall liability of Rs 270 million to different financial institutions.
Earlier, the government has divested some of its shares of Nepal Telecomm (NT) and floated to the public turning it into a public company. It is listed at Nepse currently.
The panel has suggested four alternatives — reform and operate as government entity or reform and operate under public, private partnership (PPP), divestment, send to liquidation, and merge and operate under PPP. The government has been incurring heavy losses running these loss-making entities despite their under performance.
It has also suggested to liquidate five state-owned companies — Nepal Orind Magnesite Pvt Ltd, National Trading Ltd, Timber Corporation of Nepal, National Construction Company Nepal and Nepal Engineering Consultancy Centre.
However, the panel has recommended the government to operate Nepal Food Corporation, Civil Aviation Authority of Nepal, Gorkhpatra Corporation, Nepal Television, Nepal Electricity Authority and Nepal Water Supply Corporation (NWSC) — after reforms.
Under reforms it has suggested policy reforms, structural reform, management reform, financial reform and reforms in divestment also.


INSET
FM vows to bring budget
KATHMANDU: Finance Minister Surendra pandey has vowed to bring the budget despite the UCPN-Maoists protest that have been making budget a bargaining chip for the power sharing in the government. The Maoists have been claiming that the current care-taker government cannot bring the full-fledged budget but Pandey said that he will present the full-fledged budget within 10 days as the Special Budget, he brought in June was for the essential expenses for the four months. The political stalemet after the 'surprising' resignation of Prime Minister Madhav Kumar Nepal in June has hit the economy hard in absence of the full-fledged budget for the current fiscal year.