Industry

Days after Palpa Cement started exporting cement to India, becoming the first Nepali industry to do, its top official said he has bigger plans for the winter when construction activities multiply.

“We aim to export 3,000 to 5,000 bags per day right now because, due to rainy season, the demand is low, “Shekhar Agrawal, the executive director of Palpa Cement Pvt Ltd, told NepalMinute.

“But after some months when the market picks up, we aim to export 25,000-30,000 bags per day.”

Palpa Cement, located in Sunwal, Nawalparasi, started exporting its product dubbed Tansen Cement to India from Friday, July 8. The industry sent an initial consignment of 3,000 bags of Portland Pozzolana Cement (PPC) across the Nepal-India border, it said in a press release.

Around 15 to 20 years ago, the Nepalese market trusted Indian cement brands, despite multiple local factories including Hetauda and Himal cements. But slowly the trust and belief shifted and the consumption of Nepalese cement started to increase.

Currently, there are 50 cement manufacturing companies in Nepal, including at least one co-owned by Chinese investors. But only 15 of them produce both clinker and cement, whose total annual production capacity is around 22 million metric tons. However, no company was exporting cement till now.

In its 2022/23 annual budget, eight per cent subsidy in cash was introduced to all companies who export cement using local raw materials. And Palpa Cement was the first to take advantage of it.

Palpa Cement always wanted to export cement to India, which boasts a huge market. “Nepal is going through a foreign currency and liquidity crisis.” said Agrawal. “Therefore, we wanted to start export to bring foreign currency inside the country,”

The gross foreign exchange currency reserve in Nepal stood at Rs.1146.88 billion in mid-May 2022, which was an 18 per cent drop from July 2021, according to Nepal Rastra Bank. The reason for decreasing reserves is the massive increase in imports without a subsequent increase in exports.

But will this export of cement have an effect on the crisis? “We don’t know what will happen in the future. We can only wait and see,” said Agarwal.

Irrespective of that, this has been a huge achievement for the cement industry and the country, he added.

On his long-term term plans, he said, “We want to increase our marketing and expand the dealers. But we will be selling more to both India and Nepal.”