Cement producers in Nepal have given mixed reactions to the government’s announcement to make cement on of the country’s main export products.
While the cement manufacturers welcome the news, it remains to be seen whether exporting cement will be possible, depending on the implementation of the policy. The main challenge for the producers is the cost of production, according to New Business Age.
Dhruva Thapa, president of the country’s 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.
Mr Thapa argues that the cement produced in Nepal will not be price-competitive in the international market due to multiple layers of taxation, charged by the local, provincial and federal governments as well as transportation and electricity charges.
RMC Group Director, Rajesh Agrawal, who has invested NPR9bn (US$80.7m) 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 per cent 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 market,” he said.
