- Assumption of domestic production of cement both from public and private sectors
Fifteen integrated mini, medium and large scale cement industries (refer table 2, A and B - I) and 11 clinker based mini and medium scale cement industries (refer table 2, B - II) were utilizing their capacities below 50%. These industries will utilize their respective capacities as estimated below.
Table 4:Estimated capacity utilization of existing cement
producing industries
Year | Capacity utilization (%) |
2002/03 | 46 |
2003/04 | 39 |
2004/05 | 49 |
2005/06 | 40 |
2006/07 – 2007/08 | 45 |
2008/09 – 2009/10 | 50 |
2010/11 – 2014/15 | 55 |
2015/16 – 2019/20 | 60 |
Source: 2002/03 – 2005/06, economic survey report 2006/07 – MOF.
2006/07 – 2019/20 is estimated by Arun Valley Hydropower Development Company Limited.
1.3 Domestic production, public and private sectors
The domestic production from three public sector industries is presented in Table 5.
Table 5: Domestic cement production of public sector
(Himal, Hetauda & Udayapur)
Fiscal year | Total production (MT) |
1989/90 | 101,171 |
1990/91 | 135,897 |
1991/92 | 237,327 |
1992/93 | 247,891 |
1993/94 | 315,514 |
1994/95 | 326,839 |
1995/96 | 309,466 |
1996/97 | 226,681 |
1997/98 | 139,080 |
1998/99 | 190,588 |
1999/2000 | 205,835 |
|
|
| ………contd |
Fiscal year | Total production (MT) |
2000/01 | 215,098 |
2001/02 | 233,000 |
2002/03 | 255,171 |
2003/04 | 279,412 |
2004/05 | 277,736 |
2005/06 | 212,830 |
2006/07 | 239,434 |
2007/08 | 239,434 |
2008/09 | 266,037 |
2009/10 | 266,037 |
Source: Actual production data as published in economic survey, 2004/05, MOF.
Production data from 2005/06 to 2009/10 are estimated by Arun Valley Hydropower Development Company Ltd. as per capacity utilization.
Note: Himal Cement Company was dissolved in 2002, so production data from 2002/03 depict production from Hetauda and Udayapur Cement Industries only.
Table 5 above revealed that the production of cement by public sector industries is not steady rather erratic. The maximum cement production as recorded was 326,839 MT in 1994/95 which was 62% of the total capacity. The major cement industries are in public sector and the static state of public units is a common phenomenon in developing countries. This erratic trend continued from 1993/94 to 2005/06 and may continue in the years to come. Improper and inadequate maintenance of raw materials, operational inefficiency and poor management, load shedding are the reasons responsible for such trend of production.
Cement production from 2002/03 to 2005/06 is estimated as per capacity utilization. It is assumed that the industries will increase their capacity of production by 5% starting from 45% of the capacity in 2006/07 and will maintain 60% capacity in 2015/16 and thereafter.
Table 6: Estimated cement production of private sector
Fiscal year | A | B | C | Total production (MT) |
1992/93 | 91,822 |
|
| 91,822 |
1993/94 | 91,822 |
|
| 91,822 |
1994/95 | 93,659 |
|
| 93,659 |
1995/96 | 133,860 |
|
| 133,860 |
1996/97 | 67,949 | 273,929 |
| 341,878 |
1997/98 | 88,150 | 355,368 |
| 443,518 |
1998/99 | 86,313 | 347,964 |
| 434,277 |
1999/2000 | 78,967 | 318,350 |
| 397,317 |
2000/01 | 75,294 | 303,543 |
| 378,837 |
2001/02 | 82,640 | 333,157 |
| 415,797 |
2002/03 | 84,477 | 340,561 | 1,057,152 | 1,482,190 |
2003/04 | 71,621 | 288,736 | 896,281 | 1,258,638 |
2004/05 | 89,986 | 362,771 | 1,126,097 | 1,578,854 |
2005/06 | 73,458 | 296,440 | 919,263 | 1,289,161 |
2006/07 | 82,640 | 333,157 | 1,034,171 | 1,449,968 |
2007/08 | 82,640 | 333,157 | 1,034,171 | 1,449,968 |
2008/09 | 91,822 | 370,175 | 1,149,078 | 1,611,075 |
2009/10 | 91,822 | 370,175 | 1,149,078 | 1,611,075 |
Note: Estimated by Arun Valley Hydropower Development Company Ltd.
A: Himal, Hetauda and Udayapur Cement Industries.
B: Maruti, Triveni, Panch Ratna, Butwal, Balaji, Budhha, Manakamana, Gorakhkali, Sidhhartha, Reliance, Kalash and Sagarmatha Cement Industries. ,
C: Mittal, Dynasty, Cosmos, Pashupati, Vijaya, Chitwan, Jagadamba, Brij, Bishwokarma, Nepal Abuja, and Ambe Cement Industries.
Since the individual production figures of private sector industries are not available, there are no other alternatives than to estimate the production as per their capacity utilization. The capacity utilization of the cement industries up to 2005/06 is as per the capacity utilization of existing cement producing industries given in economic survey – 2005/06, Ministry of Finance. Regarding the capacity utilization from 2006/07 to 2019/20 is estimated by Arun Valley Hydropower Development Company Ltd. for the study purpose. However this will not limit the validity of market study.
Above estimations are ambitious considering the clumsy procurement procedures of raw materials, inefficient operation, inexperienced management and all the more problem of power shedding. If they are to maintain production programme as depicted in table 6, they need optimum use of raw material, adopt scientific purchasing management and regular power supply. It is difficult if not impossible to go beyond 60% of the production due to regular power load shedding adopted by Nepal Electricity Authority at least for 5 years and a decade otherwise. The maximum production capacity utilized was 62% in 1994/95 (table 3). the capacity utilization showed declining trend that justified the future capacity utilization will not maintain more than 60%.