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Will Nepal be able to Export Cement?

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Will Nepal be able to Export Cement?
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May 5: Cement manufacturers have given mixed reaction to the government’s announcement of making cement one of the chief export products of Nepal. The government has given high priority in exporting cement in the policy and programme announced on Friday (May 3).

Although the cement manufacturers are happy about the government’s announcement, whether exporting cement will be possible or not will be known only after the implementation of the policy and programme since the country is at present producing cement less than its production capacity.

The major challenge for the cement industries is reducing the cost of production.

Dhruva Thapa, president of Cement Producers’ Association, says that exporting cement will not remain a pipe dream if the government facilitates them cost reduction.

“It is possible for Nepal to export cement but first of all the government must sort out some of the obstacles in exporting cement,” he said.

“The departments of forest, mines and land reform are seeking immediate benefit from cement manufacturers by charging high tax. Instead of short-term profit, the government should facilitate in properly establishing cement industries,” he added.

Thapa argues that the cement produced in Nepal will be too costly to compete in the international market due to multiple layers of taxation charged by the local, provincial and the federal governments and also because of the transportation and electricity charges.

Other cement producers are also of the view that exporting cement is not possible until the cost of production is reduced.

Director of RMC Group, Rajesh Agrawal, who has invested Rs 9 billion in  RMC and Palpa Cement, says that it is not possible to export cement in the current scenario.

“We import coal for manufacturing cement. For this, we have to pay for the transportation of raw materials and five percent customs duty,” he said, adding, “The mines of limestone in Nepal are not easily accessible. On the other hand, cement producers in India do not have to bear any expense for limestone. In such situation, it is not possible to compete in the international marker,” he said.

Of late, the number of cement industries is growing in Nepal. Although this indicates increase in production, the cost factor remains to trouble the producers.

According to Nepal Cement Producers’ Association, there are altogether 61 cement industries across Nepal.

 

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