Cement Industry on the Brink of Collapse due to Low Construction Activities

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Cement Industry on the Brink of Collapse due to Low Construction Activities

The cement industries operating in the country are at risk due to the lack of market. According to industrialists, the income of majority of the 63 cement industries that are operating in the country has slumped due to the lack of market. Dhruba Thapa, president of the Nepal Cement Producers Association, said that the cement industries are now on the brink of collapse.

"Due to the lack of market, industries have reached a state of collapsing. More than 20 per cent of the industries are not even running," he said. Vice President of Nepal Cement Producers Association and Managing Director of Agni Cement Tara Prasad Pokharel said that the cement industry has been affected due to the lack of construction of physical infrastructure such as roads, bridges, and irrigation in the country. "New construction works have not started, the builders have not been paid their dues, and therefore sufficient construction work has not been done. It has had a direct impact on the cement industry," he said. Pokharel said that since Indian cement is cheaper than the cement produced in Nepal, they cannot compete with the Indian products.

"The government of Nepal has given up to 8 percent cash subsidy to encourage cement export," said Pokharel, "If we want to protect the cement industry and promote exports, it is necessary to give 20 percent subsidy on export," he said.

According to the report of 10 cement companies published by various rating companies, the company's operating income of Rs 34 billion in 2020 increased by 23 percent to Rs 41.92 billion in 2021. However, compared to 2021, the income of cement industries increased by only 5 percent in 2022. Industrialist said that the income is affected due to lack of market. Similarly, in the year 2022, 10 cement industries, which earned an operating profit of Rs 44.28 billion. 

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