Huaxin to bring investment of US$ 500m

Huaxin to bring investment of US$ 500m


KATHMANDU, Nov 2 karobar Daily

Chinese government-owned company Huaxin Cement will bring investment of US$ 500 million (around Rs 52.61 billion) to establish a cement factory in Nepal. It has already proposed to the Investment Board Nepal (IBN) to bring investment.The next board meeting of the IBN to be chaired by Prime Minister (PM) KP Sharma Oli is expected to give approval to Huaxin to bring investment. Huaxin is the largest cement factory in China. It has said it will start a factory that will also produce clinker within two years. The IBN has already given approval to Hong Kong Red Lion Number 3 Limited (Hongxi Group) of China to bring investment of Rs 36 billion.

The number of foreign companies to receive permission to manufacture cement in Nepal will reach four with addition of Huaxin. These companies will bring Rs 181 billion in foreign investment including over Rs 86 billion from China. The IBN has already given permission to Dangote Group of Nigeria to bring Rs 55 billion and Reliance Infrastructure Company Limited of India Rs 40 billion. The two companies and Hongxi have already initiated the process of establishing factories, according to the IBN.

Chief Executive Officer (CEO) of the IBN Radhesh Panta said Huaxin will start work on establishing factory after receiving permission from the IBN. He revealed that Huaxin has already chosen the place to establish factory and done feasibility study for mine. The factory plans to manufacture 6,000 tons of cement a day, according to Panta, and aims to double capacity within a few years seeing the state of Nepali cement market.

Huaxin is among the 10 largest companies in China. Panta stated the country will become self-dependent on cement and even export it after entry of big manufacturers in Nepal. He said demand of cement will rise significantly as the country will soon start post-earthquake reconstruction. Hongxi Group is investing for 70 percent stake in Shivam Cement of Hetauda.

A total of 41 factories currently produce cement in the country. Over a dozen of them are based on clinker. The majority of factories in operation are expanding their production capacity. Investors are being attracted toward cement industry as the government announced special facilities for factories wishing to produce cement inside the country to slap a ban on import of cement from the next year.

Big corporate houses and business families are also coming forward to invest in cement factories. A total of 77 brands of cement—including 39 PPC, 29 OPC and nine PSC—have received Nepal Standard (NS) mark from the Bureau of Standard and Metrology and are manufacturing cement, according to the Cement Manufacturers Association.

Annual consumption of cement currently is almost 3.50 million tons. Installed capacity of the factories has reached 5.50 million tons but the majority of industries are not operating at full capacity due to energy crisis. Local industrialists, however, claim that foreign investment is not needed in cement industry and point that the current requirements can be met if the factories in operation were to operate at full capacity. But multinational companies are planning to start cement factories here considering the rising demand in Nepal and the potential market in the bordering cities of neighboring India.