Rise of Two Big Companies in Cement Industry

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Rise of Two Big Companies in Cement Industry

July 3: While business community members are currently in ‘wait and watch’ mode and are hesitant in investing amid the Covid-19 crisis, two cement industries have added billions in new investments. Dang Cement, which was limited to registration for the last 15 years, has now received approval for investment worth Rs 32.50 billion with the goal of producing cement and clinker within the next three years. Likewise, Samrat Cement Industry has also sanctioned Rs 15.05 billion to expand its clinker and cement production capacity. Investment Board Nepal (IBN) has already approved their investment proposal on June 19. With this, a total of Rs 47.55 billion investment will be added in the cement industry.

Samrat Cement, which was registered in the Department of Industry in 2070, had then received approval for investment of Rs 7 billion to produce clinker as well. Currently the company, which has been producing cement only, has said that it will also produce clinker. The company’s Chairman Mukunda Prasad Timilsina said that although they had bought clinker and started cement production, they weren’t operating at full capacity. Samrat Cement has 50 percent share of locals of Dang.

“The industry produces 30,000 sacks of cement every day,” informed Timilsina, adding, “We are in the final stage of preparation for the production of clinker. We will be starting our clinker production in three months.” He also informed that the company will also generate 6MW electricity itself for the production of cement and clinker. Seven years after its registration, the company has doubled its investment and expanded its capacity.

The production capacity of Samrat cement was 1,800 tonnes per day during the initial days. With the increment in investment, Timilsina said they now produce 4,500 tonnes clinker and 3,600 tonnes cement daily. The company has been producing cement at only 30 to 40 percent of its capacity. It will be operating with full capacity workforce, raw materials management and technicians from India arrive. The company has even taken limestone mines at Dang and Rolpa. At present, the company has provided employment to 150 people and after capacity expansion, 500 people will get employment.

Meanwhile, Dang Cement has to start from start even though it has received principle agreement for investment from IBN. The company aims to commence production within three years after completion of legal processes. Dang Cement was bought by an Indian company after the then Ambuja Cement failed to bring the project. The company had stopped working due to the deteriorating business climate during the conflict era. An official of Dang Cement said that no other works besides purchase of some land and company registration progressed during that period.

The shares of the Dang Cement, which had investment from Ambuja Group of India, is now owned by Hong Kong Redline which associated to the Chinese cement giant Hongsi. The company, which has seen a significant increase in investment, aims to produce 6,000 tonnes per day. The company aimed to produce 1,200 ton cement while registering the company. According to the company’s officials, the industry will produce cement by making clinker with the additional investment.

The company has also planned to produce clinker and sell to other companies as well. The official said, “Now we will work from the scratch. We have only received the in principle agreement from the board.” According to him, although the company is registered, there hasn’t been any work and as the development possibility in the western region is high now, the company is willing to invest. He said that even though the investment looks challenging, cement and clinker can be produced at low cost as it uses high technology and can also be sold at a lower price than others. Neither construction work nor the factory work has been done at present. He said that more than 500 people will get direct employment when the industry comes into operation.

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