Half a Dozen Cement Industries in Bara-Parsa Industrial Corridor Closed

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Half a Dozen Cement Industries in Bara-Parsa Industrial Corridor Closed

BIRGUNJ: At one time, the Bara-Parsa Industrial Corridor was considered the center of cement production. Now, most of these industries have shut down, while others operate below their capacity. An industrialist mentioned that he is compelled to keep the industry running merely to cover workers’ expenses and manage bank loans.

"Instead of making a profit, the industry is being operated to minimize losses. It is uncertain how long we can continue selling cement at a price lower than the cost," the industrialist stated.

Anil Agarwal, an industrialist, decided to permanently close his industry when he could no longer sell cement at a loss. Agarwal's Shree Cement ceased production after the COVID-19 pandemic.

Agarwal, who is also the president of the Birgunj Chamber of Commerce and Industry, explained that with the influx of foreign investment in the cement sector, industries based on grinding units (making cement by importing clinker) began to collapse.

Recalling that Bara-Parsa was once the hub of cement production, he noted, "Half a dozen cement industries in this corridor have shut down due to market shrinkage caused by COVID-19 and intense competition."

Even when cement is sold below cost, the industry cannot survive the competition and is forced to stop production. Industrialists claim that investments totaling around Rs 10 billion have been lost due to the closure of industries in the corridor.

The industrialists explained that the grinding units in Bara-Parsa and other areas began facing problems when Chinese-invested industries entered the market with cement priced cheaper than their production costs. The government has adopted a policy of imposing high customs duties on clinker imports to promote the domestic clinker industry.

As a result, industries reliant on imported clinker were unable to compete and had to shut down. Currently, only Jagdamba, Shalimar, Narayani, and Vishwakarma cement industries in the corridor continue production. International Cement, Krishna, RMC, Shree Cement, Ambe, and Advance Cement have all closed, with Star Cement shutting down earlier.

An industrialist noted that the recession following COVID-19 adversely affected the corridor industries, which now struggle to compete with large-scale clinker-producing industries.

"Industries with significant investments began quoting higher clinker prices and selling cement at lower prices. This led to a situation where those buying clinker from these industries could not survive in the market," said Sandeep Agarwal, owner of the now-closed International Cement.

Approximately 111 industries in the corridor had good production, contributing to Nepal's self-sufficiency in cement. "Five to seven years ago, this corridor was the center of the cement industry. However, all those industries were grinding units," said Agarwal. He believes the industry's decline began when large industries with Chinese investment started flooding the market with cheap cement.

Although some industrialists attempted to export to India, these plans were unsuccessful. The government had announced an increase in cement exports by subsidizing both the export price and electricity consumption.

An industrialist mentioned that they failed to export cement due to issues to meet the Indian quality standards for export.


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