Nepal has been heading towards self-sufficiency in cement, but at the same time, imports of clinker have soared, according to the Trade and Export Promotion Centre (TEPC).

The country imported clinker worth NPR8.97bn (US$83.7m) in the first six months of the current fiscal year, reports the TEPC. The figure is an almost six-fold jump from NPR1.52bn in the first half of the previous fiscal year 2015-16.

According to the Cement Manufacturers Association Presiden, Dhurba Thapa, the major reason behind the surge in clinker imports this year is the slump last year due to a blockade imposed by India. "Imports of clinker from India account for around 35-40 per cent of our total consumption," Thapa said.

Government records show that the country has abundant limestone reserves, but cement manufacturers have preferred to rely on imports instead of tapping the deposits for lack of a conducive environment for industrial development.

Prabal Jung Pandey, executive director of Eastern Cosmos Cement, said, "It is not that we haven’t succeeded in establishing a clinker industry. It has been improving gradually, but the current scenario seems bleak because of a significant surge in demand for cement which has compelled domestic factories to increase the import of clinker," Mr Pandey said.  

While clinker imports have soared, the story of cement is different. In the first six months of the current fiscal year, Nepal imported cement worth NPR509m, a decline of 11.3 per cent YoY. In the first half of fiscal 2015-16, the country imported cement worth NPR574.67m.

According to Mr Pandey, there are 48 cement factories in the country. Among them, 14 produce their own clinker and have a grinding unit. Domestic cement companies say they have been witnessing a 15-20 per cent growth in sales every year, which is enclouraging new investment in teh sector.

Hongshi Shivam Cement, a Nepal-China joint venture company, has started building its cement plant at Sardi in Nawalparasi. China’s Hongshi Holding Group is investing NPR36bn (70 per cent of the outlay) in the project while the rest of the capital is being injected by the local partner. The factory will have a capacity of producing 6000tpd of cement and is expected to come online in 2017.

Likewise, the Dangote Group of Nigeria has a plan to invest NPR70bn in a cement factory in Nepal.