Nepal's production utilisation rate is running at half the installed capacity

Nepal is estimated to require 25.88Mta of cement by 2024-25 due to an investment push in mega infrastructure projects, according to a new report by Nepal Rastra Bank (NRB). However, the current situation is that Nepalese cement companies output has failed to meet the installed net production capacity.

There is a cement demand for 9.05Mt in the domestic market, but the country has imported 1.56Mt to meet cement demand.

There are a total of 55 cement industries in the country, which have produced 7.49Mt against their net production capacity of 15Mta, according to the report ‘Foreign investment in Nepal’s cement industries: A study of socio-economic impact’ made public.' The survey was conducted in seven cement factories-three run by foreign investors, two state-owned and two private sector-run factories.

The average production capacity utilisation of a cement company hat has attracted foreign direct investment is 45.81 per cent and that of those industries with the investment of government and private sectors is 50.12 per cent and 63.78 per cent, respectively. 

Foreign direct investment in the cement industry in Nepal stands at NPR56.97bn (US$486m). Two new foreign-funded plants are under construction, according to the survey report. These three foreign investment cement facilities constitute 20.31 per cent of the total installed capacity of the cement industry.

Nepali investors have injected NPR122.33bn in the cement industry. According to the report, the average production of the three foreign investment factories is 2,783tpd while the two state-owned factories churn out 820tpd. The 50 private factories collectively produce 622tpd.