GCIB Programme : English Language Skill for Business

Module Code HUMS 3006

Assignment 1: Group Report

The Market for Cement in Nepal

Module Tutor: Hans Breitenstein

Student Number: P16073258

P1607285X

P1607218

P16073045

Submission Date: 25-04-2017

Word Count: 1901

(Excluding references and cover page)

 Abstract

Cover page. Page 1

Abstract .. Page 2

Summary Page 3

1. Introduction.. Page

2. Demand of cement in Nepal. Page

3. Falling imports. Page

4. Export of cement.. Page 6

5. SWOT Analysis... Page 7

5.1. Strength. Page 7

5.2. Weakness page 7

5.2.1. Shortage of light. Page 7

5.2.2 Shortage of fuel. Page 8

5.2.3 Transportation... Page 8

5.3. Opportunities ... page 8

 5.4. Threats Page

6. Conclusion Page

7. Recommendation ... Page

8. References..page 1

Summary:

Nepal is a developing country. Construction of building, road & many infrastructures was

established each day there, for which cement is significant material. Not only that, after the

earthquake of 2015 there was a destruction of lots of houses, building, and substructure which

were going to maintain rapidly for those purpose cement was essential. This report delivers how

huge area of the market is coverage by cement industries in Nepal. For this following points are

discusses:

- Demand of cement in Nepal

- Strength of cement industries in Nepal

- Problem that cement industries facing in Nepal

- Falling Import

- Export of cement
 1. Introduction:

Cambridge Dictionary defines Cement as the soft gray powder that is mixed with water and

sands to make mortar or it is a power mixed with water stands and small stones to make

concrete. Similarly, according to Hewleett, P. (2003) cements means gum materials which are

able to join rubbles or masses of solid substance to close the whole. This definition suggest a

various number of substances having little mutual with one another but their gumminess and the

very unequal technical and scientific significance of dissimilar members of the class has likely to

bring about a restriction of the description to one group of paste materials, namely, to the plastic

materials employed to make union between stones, bricks etc. in the construction of buildings,

bridges and many more engineering work. Cement is used worldwide as building construction

material and is an essential for concrete as well as key material for global housing and present

infrastructure wants. Likewise, Henn, R. W. & Soule, N. C.(2010) provide a reference to The

International Society for Rock Mechanics ( ISRM) & says that cement categorized by a better

refinement and smooth, steep particle size distribution.

According to Ghimire, B. (2016) report of the department of industry 105 cement industries was

registered in Nepal. Among them, 54 industries have received Nepal standard. Ghimire, also

mentation that total depletion of cement in Nepal is 120,000,000 (12 crores) Sacs. More than

Rs.60, 000,000,000 (60 Arab) of Nepalese currency was consumption amount in turnover. In

this condition, 110,000,000 (11 Crore) Sacs was fulfilled by domestic industries from Nepal &

100,000,000 (1 Crore) Sacs imports from foreign lands.it means that cement market is moving

to self- sufficiency. Average of 1.5 metric ton cement consumption before 2000 A.D & 80 % in

total consumption use to import from India but after 2003 A.D it was changed. Cement

production in Nepal has been growing very fast than the previous year. Substructure &

organization established, started cement producing. In distance of 13 years, 38 cement

industries grown and they have been producing 3.5 million metric ton cement. But demand is
about 4 million metric ton. Power shortage and fuel shortage and the capacity of industry are

some impacts that cement industry was facing at the time. Gimire (2016) state that

Bishowkarma cement is believed to be first cement industry as a private cement company in

Nepal which have been leading 10% of proportion.

2. Demand of cement in Nepal

Tripati, A. & Sharma, S. (2015) news report states that cement industry has seen significant

growth over the last few years though they facing lots of problem for producing. President of the

Cement Manufactures Association of Nepal (CMAN) says Nepalese cement industry has been

gradually growing at 8-10 percent annually for the past several years & its future looks bright.

He further added that 4 million metric ton is annulled demand and a 3.2 million metric ton is fulfil

by domestic production and other from imports.

Because of rising domestic cement production import has sinking year by year. According to

Trade & Export Promotion (TEPC) imports of cement has declined over last year. In the year of

2012-13 OPC cement imports rate was Rs.3.75 billion whereas in the year of 2013-14 it was

Rs.2.99 billion. This data shows the Nepals progress towards independence in cement

production. According to CMAN Nepalese domestic industry has a capacity of about 6 million

tons of production capacity and they only utilise about 50 percent of their total production

capacity. Out of 45 factories, 12 factories were also producing clinker which is the most

important material used in cement production. Nepal uses to depend on India for clinker as a

decade ago. Nepal import 95% of clinker. After 2015 a few industries start producing own

clinker and it bring down in import clinker to 20-25 percent.

3. Falling Import

According to Tripati, A. & Sharma, S. (2015) news report, import of cement has gone down over

the past year because of the rise of domestic production. Data from the Trade and export
Promotion Center clearly shown that country which imported OPC and PPC cement worth

Rs.4.31 billion in 2009/10 saw the import decrease 30 percent to Rs.2.99 billion in 2013/14. This

also led to increasing in the import of Gypsum, one of the major elements of cement that worth

Rs 754 million in 2013/14 and goes up 133 from Rs.322 million in 2010. But clinker, another key

material is gradually declining. Import of in 200/10 record Rs.8.03 billion but it decreased to

Rs.5.99 billion in 2012/13 before rising to Rs.6.54 billion in the last year.

Import

Year Value Quality in KG

Portland cement ( OPC & PPC)

2009/10 Rs.4,311,815,429 Rs.960,943,023

2010/11 Rs.4,458,516,236 Rs.804,348,268

2011/12 Rs.3,293,592,614 Rs.500408530

2012/13 Rs.3,748,763,967 Rs.489,710,279

2013/14 Rs.2,995,354,890 Rs.396,733,030

Gypsum

2009/10 Rs.3,22,290,202 Rs.63,329,369

2010/11 Rs.5,32,049,286 Rs.98,976,163

2011/12 Rs.544,908,801 Rs.97,142,657

2012/13 Rs.757,736,619 Rs.140,613,006

2013/14 Rs.754,124,528 Rs.142,811,995

Cement Clinkers

2009/10 Rs.8,039,134,496 Rs.1,306,598,490

2010/11 Rs.1,596,120,503 Rs.1,596,120,503

2011/12 Rs.6,904,342,928 Rs.1,075,496,505

2012/13 Rs.5,993,044,236 Rs.922,343,880

2013/14 Rs.6,547,446,621 Rs.1,009,559,410 4. Export of

cement

According to Tripati, A. & Sharma, S. (2015) news report states that with the rise in production,

export of Nepalese cement also increases in the past few years. Though the size of the export
is slight compared to the import, the rising trend indicates to the possibility of Nepalese cement

becoming a product of comparative improvement to the countrys export. Nepal exported

cement worth Rs.3.16 million in 13/14, after starting the export in 12/13 which was recorded at

Rs. 148,700. Tej Bom, Head of the Sales and Marketing at Ambe Cement says that it takes

some more time for Nepal to become an exporter of cement. Current cement industries not

being able to fulfil the domestic demand so there is no opportunity of export cement currently.

Most of the industries are selling their product within the country. If it meets the domestic

demand than Nepalese industries will obviously export cement in the international market.

Export

Year Value Quality in KG

2012/13 Rs.148,700 Rs.18,190

2013/14 Rs.3,162,985 Rs.396,200

5. SWOT Analysis:

5.1. Strength: According to Er. Thapa (2017, online) , the cement markets were faced a lot of

problems in beginning. But it is increasing gradually with increasing of factories of cement in

Nepal. In domestic sector, it has high value. In past years, the demand of cement in domestic

was low but nowadays, it is increasing yearly. It is producing about five million tons of cement

per year. Besides that, domestic companies are able to fulfils 80% of demand. Clinker

production helps to fulfil demand of cement in domestic sector. The key power to cement

industry is a worthy work force.

5.2. Weakness: Nepal is developing the country. Cement industries were continuously

established. It has a great demand for cement for the construction of building, houses, bridges
and other infrastructures were establish day to day though it has facing lots of problem

production of cement production.

5.1.1 Shortage of light

The establishing of cement industries increase each day in Nepal but the light supply becomes

the major problem accoring to Tripathi, A. & Sharma, S. (2015). Cement industries were can not

able to produce cement as they have the capacity to production as they have huge demand.

Light cut problem creates directly effect on the production of the cement.

5.1.2. Shortage of flue

The flue is essential material to run any industries. GImire, B. (2016) says that Nepalese

industries were facing the shortage of flue and government is not paying attention towards it.

For this reason, Nepalese cement industries are not able to produce as their capacity.

5.1.3. Transportation

Transportation is another big problem for cement industries in Nepal according to the Tripathi,

A. & Sharma, S. (2015). To supply raw material or well product cement there is problem of

transportation. Nepalese cement industries are unable to supply their product to the market due

to transportation, so it is important to give attention towards it too.

5.3. Opportunities: Nepal is still undeveloped country where economic growth in cement

industries very slow. There are domestic cement industries might be opportunities to fulfil

demand for physical infrastructure development like highways and houses. Bhusal (2015,

online) said that Nepals government has decided that they can establish new cement factories

which have capacity to produce 3000 tonnes cement per year. After earthquake, there were
three million people have been lost their house. The cement industries of Nepal have

opportunity to produce a large amount of cement to reconstruction the damage areas during

earthquake.

5.4. Threats: Due to earthquake, In Nepal, there were many building such as temples, houses

and hospitals destroyed. According to Awale (2015, online), cement industries of Nepal produce

a large amount of cement for reconstruction. But there are major threats present like the lack of

strict implementation mechanisms and deficient construction material.

6. Conclusion

Cement is an essential material for construction. And demand for the cement is high in Nepal

not only that cement industry is growing its production better than use to be. After the starting

period of time trend growth and performance of cement industry is increase each day and

domestic company are able to produce fulfilling the 90% of demand in Nepalese market.

7. Recommendation

Future of cement industry is very bright but it has some issues that directly and indirectly effect

on its market. Some of the company were producing low-quality cement so it is important to

increase the quality. Quality product wins the heart of consumers and its demand automatically

became high. Not only that, Power shortage is next cause that hampers in the production of

cement in Nepal. If power shortage somehow stops there is more production of cement in

future. And it is important to stop fuel shortage to increase the production. Raw material for

cement available easily there so it is important to give more attention towards it that may helpful

for future. For this, it is a priority of government to provide regular electricity & manage for fuel to
the industry. If all these effects were minimized production may more increase & it creates more

demand for cement in the market for coming days.

References

Awale, S. (2015) Substandard construction material still a threat, The Himalayan Times, 29

August, available from http://thehimalayantimes.com/real-estate/substandard-cons-still-a-threat,

accessed on 25 April 2017.

Bhushal, R. (2015) Nepal earthquake: boon for industry, disastrous for the environment, the

third pole.net, 23 July, available from http://www.thethridpole.net/2015/07/23/nepal-earthquake-

boon-for-industry-disastrous-for-the-environment/, accessed on 25 April 2017.

Cambridge dictionary available from http://dictionary.cambridge.org/dictionary/english/cement,

accessed on 21 April 2017

Er. Thapa, D. (2017) Expert Views on the Cement Industry in Nepal, New Business Age, 22

January, available from www.newbusinessage.com/Magazine Articles/view/1686, accessed on

25 April 2017.
GImire, B. (2016) Industry Analysis Profile on Cement Industry of Nepal, available in

https://www.linkedin.com/pulse/industry-analysis-profile-cement-nepal-biraj-ghimire, accessed

on 25 March 2016

Hewleett, P. (2003) Lea's Chemistry of Cement and Concrete (E-Book), Elsevier Science,

available from http://zr7av6yc4v.search.serialssolutions.com/?ctx_ver=Z39.88-

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9&paramdict=en-UK, accessed on 12 November 2017

Tripathi, A. & Sharma, S. (2015) New Business age: Growing and Growing, available in

http://www.newbusinessage.com/MagazineArticles/view/1199, accessed on 29 may 2015

Henn,R.W. & Soul, N. (2010) Ultrafine cement in Pressure Grouting (E- Book), American
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