Hetauda Cement Industries sees losses mount up

A combination of COVID-19, stalled construction activities and falling cement sales have seen Hetauda Cement Industries' losses grow fivefold YoY. The state-owned Nepalese company amounted losses totalling NPR50m (US$417,872) in the last fiscal year ended mid-July.

According to the factory, it was able to sell only 1.45m bags of cement and clinker out of the 1.9m bags it produced in the last fiscal year.

Sarju Aryal, head of the sales division, said the factory was left with about 400,000 bags of unsold cement due to lost business during the peak construction season which lasts from mid-March to mid-May.

"It was largely due to COVID-19 triggered lockdowns and restrictions. The factory stopped clinker production for two weeks due to excess stock in the warehouse.

"The virus is also making it difficult to import coal. We are preparing to resume clinker production by August-end as soon as the remaining inventory of cement is sold," said General Manager, Prem Shankar Singh.

Dhurba Raj Thapa, president of the Cement Manufacturers Association of Nepal, said that cement factories remained closed for two months during the lockdown that started from 24 March. They have resumed operations but only partially as there is no demand for their products in the market, he said.

According to him, demand for cement has plunged 80 per cent with both government and private sector construction projects at a standstill due to COVID-19 and official measures to stop the spread of virus by allowing the transportation of only essential goods.