Rise in cement prices will be reviewed: NCMA

- Post Report, Kathmandu

Apr 10, 2017-

Nepal Cement Manufacturers Association, an umbrella organization of cement manufacturers in the country has agreed to review the recent price hike. On Tuesday, Industry Minister Nagendra Raj Joshi had requested cement manufacturers to review the price hike, realising the massive need of construction materials for the ongoing reconstruction drive.

Cement prices had increased recently by Rs 20 – Rs 25, per sack. In a follow up meeting called by Joshi on Sunday, the manufacturers said they are committed to lowering the price.

During the meeting, Dhurba Thapa, President of Nepal Cement Manufacturers Association, said that cost of cement production in Nepal is one the highest in South Asia. Thapa added that the association has agreed to inform members requesting them to review cement price to honor the request made by the government, states a statement released by the Industry Ministry.  

On Tuesday’s meeting, Thapa had stated that the price was increased following the increase in cost of raw materials and shipping cost. Price of cement had increased by Rs 100 per sack, on average, last year. While power related issues have been reduced with Nepal Electricity Authority (NEA) ensuring smooth supply of electricity in recent days, rise in cost of clinker and coal has played a crucial role in the price hike. Domestic cement manufacturers are dependent on clinker imported from India and coal imported from Indonesia and South Africa.

An estimate shows a demand of around 5–5.5 million tons of cement in the country every year. Domestic industries contribute to around 80 percent of the total demand. Remaining 20 percent in imported from India. 

30 percent of the clinker required by industries in Nepal comes from India.

According to the Trade and Export Promotion Centre (TEPC), the country imported clinker worth Rs8.97 billion in the first six months of the current fiscal year. The figure is an almost six-fold jump from Rs1.52 billion in the first half of the previous fiscal year 2015-16 as construction sector was hit hard by the economic blockade.

Around 9,000 people were killed and over 20,000 were injured in the 2015 earthquake, according to the data of Home Ministry. Similarly, 608,155 homes have been completely damaged, while 298,998 homes have been partially damaged, highlighting the massive scale of reconstruction to be carried out. According to the Post Disaster Needs Assessment prepared by Nepal Planning Commission (NPC), Nepal sustained a loss of USD 7 billion due to the earthquake. The report had stated that the country requires USD 6.67 billion to drive reconstruction initiatives.

Meanwhile, Joshi also urged cement manufacturers to help an initiative led by the ministry, by contributing a certain portion of their profits for the betterment of under privileged children. The ministry started the initiative last week with an announcement that it will be spending Rs 1.5 to Rs 2, per sack from the sales of cement manufactured by Hetauda Cement Industry and Udaypur Cement Industry. Both the industries are state owned.

Published: 10-04-2017 08:20

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