Cement manufacturers have asked the government to formulate an improved policy so that the country can achieve self-sufficiency and boost exports.

They have demanded, in particular, assistance for extracting and transporting raw materials besides uninterrupted electricity supply.

Currently, most cement factories rely on imported limestone, the chief raw material used in making cement. Due to high import costs, domestic products have not been able to compete with cheaper Indian cement.  

Considering the huge flow of foreign investments in the cement industry, Nepal is likely to produce a surplus in the near future.

Rajesh Agrawal, managing director of Arghakhanchi Cement, said they could manufacture cement in sufficient quantities to fulfil domestic demand and export to the southern neighbour if they received government support.

“There is high demand for Nepali cement in Bihar and Uttar Pradesh states in India in particular,” he said. He added that Nepal had high potential for supplying adequate raw materials.

There are around eight cement factories in the country that have their own limestone quarries.

Among them, Ghorahi Cement of Dang, Sonapur Cement of Tulsipur, Arghakhanchi Cement of Bhairahawa, Sarbottam Cement of Nawalparasi, Shivam Cement of Hetauda and Maruti Cement of Mirchaiya are privately owned. Hetauda and Udaipur brands are produced by state-owned enterprises.

Cement manufacturers have also asked for government subsidies to install ropeways and other infrastructure required to transport limestone from the mines to the factories.

Cement factories in India face high transportation costs when bringing limestone, so Nepali factories are in a better position to manufacture and export cement at competitive prices.

Agrawal said many new investors were being drawn towards the sector of late. “After the country starts producing cement in large quantities, we will need to explore foreign markets to export our surplus,” he said.

There are 40 cement factories operating in the country. According to them, domestic demand totals 4 million tonnes annually. Nepali mine-based cement plants churn out 2.5 million tonnes while clinker-based factories produce 1 million tonnes annually. The remaining requirement of 500,000 tonnes worth Rs1.5 billion is imported from India.

Rabi Ranjan, general manager of Brij Cement, said the government should devise an appropriate industrial policy. He sought government support for importing raw materials like coal, rock side, iron ore and gypsum. “It will increase the competitiveness of domestic products,” he said.

A number of new cement plants are in the pipeline while some of the existing ones have planned to expand their production capacity. Among the new companies, Hwangsi Shivam Cement, a joint venture, will be setting up its factory in Nawalparasi. It expects to manufacture 2 million tonnes of cement annually. Similarly, Arghakhanchi Cement will be expanding its production capacity to 1 million tonnes from 400,000 tonnes in the next one and a half years.