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Introduction to Nepalese Cement Market





Untitled Document



    1. Introduction

The use of cement in Nepal as binding material came into effect in Nepal from the beginning of early 1950's. As no indigenous cement manufacturing industry existed, early users of cement were dependent on imports from India to meet their needs. Gradually, around 1965, the supply of cement was diversified in the form of foreign aid programme. The cement was started to import in commercial scale only in the early 1970's from China, South Korea, North Korea, Burma, Indonesia, Thailand, Japan, Hong Kong and many other countries.

In 1975, the first cement plant, Himal Cement Company Limited, came into being to provide Nepal's first state – owned cement manufacturing facility. Its production capacity initially was 160 tpd and subsequently a new Chinese plant with the production capacity of 200 tpd was added making total capacity of 360 tpd. Then two additional plants, one at Hetauda, Hetauda Cement Industries Limited with the production capacity of 750 tpd and other at Udayapur, Udayapur Cement Industries Limited, with the production capacity of 800 tpd were added to the state cement manufacturing capability. Himal Cement Company was dissolved in 2002 due to environmental cause.

At present, in addition to two public sector cement industries and three private mini integrated cement industries, company registration book of the Department of Industries shows 27 mini, medium and large scale integrated cement industries and 17 mini and medium scale clinker based industries are registered. List of registered cement industries is given in Table 1.

 

Table 1: Cement industries registered in Department of Industries



S. No.

Name of industry

Installed capacity (MT)

Clinker MT/PA

Cement MT/PA

A.

Public sector

1.

Himal Cement Company

Dissolved

Dissolved

2.

Hetauda Cement Industries Ltd.

247,500

259,875

3.

Udayapur Cement Industries Ltd.

264,000

277,200

Sub - Total (A)

511,500

537,075

B.

Private Sector

I.

Integrated cement industries

1.

Maruti Cement Udhyog

150,000

157,500

2.

Triveni Cement Udhyog

9,900

10,395

3.

Pancha Ratna Udhyog

15,000

15,750

4.

Butwal Cement Mills Pvt. Ltd.

30,000

31,500

5.

National Cement Pvt. Ltd.

60,000

63,000

6.

Surya Cement Pvt. Ltd.

120,000

126,000

7.

Balaji Cement Udhyog

30,000

31,500

8.

Kanak Cement Pvt. Ltd.

120,000

126,000

9.

Budhha Cement Pvt. Ltd

60,000

63,000

10.

Laxmi Cement Industries Pvt. Ltd.

90,000

94,500

11.

Manakamna Cement Pvt. Ltd.

30,000

31,500

12.

Buddha Cement Industries

300,000

315,000

13.

Gorkhali Cement Udhyog Pvt. Ltd.

75,000

78,750

14.

Sidhhartha Cement Udhyog

150,000

157,500

15.

Dynasty Industry Nepal Pvt. Ltd.

90,000

94,500

16.

Reliance Company Pvt. Ltd.

150,000

157,500

17.

Shivam Cement Pvt. Ltd.

150,000

157,500

18.

Kalash Cement Pvt. Ltd.

45,000

47,250

19.

Dang Cement Industries Pvt. Ltd.

237,600

249,480

20.

Om Cement Pvt. Ltd.

39,600

41,580

 

 

 

 

 

 

……..contd

S. No.

Name of industry

Installed capacity (MT)

Clinker MT/PA

Cement MT/PA

21.

Shyam Mineral Industries Pvt. Ltd.

60,000

63,000

22.

Koshi Cement Udhyog Pvt. Ltd.

10,500

11,025

23.

KP Cement Industries Pvt. Ltd.

43,000

45,150

24.

Jaybageswori  Cement Industries

15,000

15,750

25.

Jayakali Cement Udhyog Pvt. Ltd.

12,000

12,600

26.

Sagarmatha Cement Pvt. Ltd.

163,721

171,907

27.

Shiva Shree Jagadamba Cement Mills

120,000

126,000

Sub Total (B - I)

2,376,321

2,495,137

II.

Clinker based cement industries

1.

Lumbini Cement Pvt. Ltd.

150,000

157,500

2.

Mittal cement industries Pvt. Ltd.

30,000

31,500

3.

Dynasty industry Pvt. Ltd.

30,000

31,500

4.

Cosmos Cement Industries Pvt. Ltd.

90,000

94,500

5.

Pashupati cement Pvt. Ltd.

132,000

138,600

6.

Vijaya Cement pvt. Ltd.

90,000

94,500

7.

Chitwan cement Udhyog pvt. Ltd.

30,000

31,500

8.

Jagadamba Cement Industry Pvt. Ltd.

66,000

69,300

9.

Narayani Cement udhyog Pvt. Ltd.

15,000

15,750

10.

Krishna Cement Co. Pvt. Ltd.

60,000

63,000

11.

Brij Cement industries Pvt. Ltd.

60,000

63,000

12.

Bishworkarma Cement Pvt. Ltd.

132,000

138,600

13.

Amber industries Pvt. Ltd.

45,000

47,250

14.

Suprim Cement Pvt. Ltd.

150,000

157,500

15.

Nepal Ambuja Cement udhyog

60,000

63,000

16.

Ambe cement Pvt. Ltd.

90,000

94,500

17.

Shree Cement industries Pvt. Ltd.

60,000

63,000

Sub – Total (B – II)

1,290,000

1,354,500

Grand Total (A+B)

4,177,821

4,386,712

Source  : Department of Industry, 2008

Among 27 mini, medium and large scale integrated cement industries in private sector, 12 industries are producing cement. Similarly, out of 17 mini and medium scale clinker based industries, 11 industries are producing cement. The list of industries is shown in table 2.

Table 2: Cement industries under production, installed production capacity and estimated production in 2005/06



S. No.

Name of industries

Installed capacity

Cement (MT/PA)

Installed production

Cement (MT/PA)

A.

Public Sector

1.

Himal Cement Company

124,740

Dissolved in 2002

2.

Hetauda Cement Industries Ltd.

259,875

103,950

3.

Udayapur Cement Industries Ltd.

272,200

108,880

Sub - Total (A)

532,075

212,830

B.

Private Sector

I.

Integrated Cement industries

1.

Maruti Cement Udhyog

157,500

63,000

2.

Triveni Cement Pvt. Ltd.

10,395

4,158

3.

Pancha Ratna Udhyog

15,750

6,300

4.

Butwal Cement Mills Pvt. Ltd.

31,500

12,600

5.

Balaji Cement Udhyog

31,500

12,600

6.

Budhha Cement Pvt. Ltd.

63,000

25,200

7.

Manakamana Cement Pvt. Ltd.

31,500

12,600

8.

Gorkhali Cement Udhyog Pvt. Ltd.

78,750

31,500

9.

Siddhartha Cement Udhyog

157,500

63,000

10.

Reliance Cement Pvt. Ltd.

157,500

63,000

11.

Kalash Cement Pvt. Ltd.

47,250

18,900

12.

Sagarmatha Cement Pvt. Ltd.

171,907

68,763

Sub - Total (B - I)

954,052

381,621

 

 

 

 

 

 

 

 

 

 

 

………contd

S. No.

Name of industries

Installed capacity

Cement (MT/PA)

Installed production

Cement (MT/PA)

II.

Clinker based cement industries

1.

Mittal Cement Industry Pvt. Ltd.

31,500

12,600

2.

Dynasty Industry Nepal Pvt. Ltd.

31,500

12,600

3.

Cosmos Cement Industries Pvt. Ltd.

94,500

37,800

4.

Pashupati Cement Pvt. Ltd.

138,600

55,440

5.

Vijaya Cement Pvt. Ltd.

94,500

37,800

6.

Chitwan Cement Udhyog Pvt. Ltd.

31,500

12,600

7.

Jagadamba Cement Industries Pvt. Ltd.

69,300

27,720

8.

Brij Cement Industries Pvt. Ltd.

63,000

25,200

9.

Bishwokarma Cement Pvt. Ltd.

138,600

55,440

10.

Nepal Ambuja Cement Udhyog

63,000

25,200

11.

Ambe Cement Pvt. Ltd.

94,500

37,800

Sub-Total (B - II)

850,500

340,200

Grand Total (A + B)

2,336,627

934,651

Note: Cement industries under production are reported by dealers of various cement industries.

The actual production data of existing cement industries both integrated and clinker based as shown in economic survey report 2006/07 are 613,643 tonnes in 2005/06 and 644,325 (production data for 8 months only) are low. Production is estimated as per capacity utilization shown in table 3.

Table 3: Capacity utilization of existing cement producing industries



Year

Capacity utilization (%)

1994/95

62

1995/96

51

1996/97

37

1997/98

48

1998/99

47

1999/2000

43

 

 

 

…….contd

Year

Capacity utilization (%)

2000/01

41

2001/02

45

2002/03

46

2003/04

39

2004/05

49

2005/06

40

                 Source: Economic survey 2006/07, GON, MOF.

The demand of cement in the country is being met through domestic production as well as from imports. The domestic production is predominantly form the public sector till 2001. After 2001 the private sector is dominantly gaining ground in the share of domestic production of cement and market.

The estimated capacity utilization both for public and private sector industries are shown in table 4. Considering the capacity utilization in the past, the capacity utilization as estimated seems ambiguous. The industries will utilize their capacity to 60% maximum. The capacity utilized is limited due to non – availability of adequate raw materials in time, operational insufficiency, defects in management, over manning, power load shedding etc.