State-owned oil monopoly Nepal Oil Corporation (NOC) has decided to re-enter the bitumen business in a bid to diversify its product portfolio.

A plan to import bitumen has already been approved by the board, NOC spokesperson Bhanubhakta Khanal said. “We are holding talks with Indian Oil Corporation (IOC) on this new venture.”

Bitumen is a black sticky substance used for road surfacing and roofing. One form of bitumen is commonly known as tar.

Khanal said NOC would import bitumen in sealed drums directly from IOC to ensure quality. “However, we are yet to finalize the quantity,” he said.

NOC had its own bitumen production plant in Amlekhgunj. It was closed in 1996 after running into losses. The government subsequently sold the factory to a private company as part of its privatization move.

According to NOC, it decided to go into the bitumen business following growing complaints about the poor quality of the product supplied by contractors. “We have been asked by many contractors to import and supply quality bitumen,” Khanal said.

“We have been planning to buy bitumen from IOC, and it is willing to fulfil our requirement.”

He said that quality bitumen would ensure long-lasting black topping in road construction. “The poor quality of the bitumen being used in black topping is one of the main reasons behind the bad roads across the country.”

NOC has been making a profit after clearing its outstanding dues totalling Rs36 billion in the last fiscal year, allowing it to diversify investments.

Apart from India, Nepal imports bitumen from Singapore, Saudi Arabia and Malaysia.

According to the Department of Customs, bitumen imports totalled 40,500 tonnes valued at Rs1 billion in the last fiscal year. India accounted for 65 percent of the shipments.