May 20, 2018-Hongshi-Shivam Cement, a Nepal-China joint venture company, started trial production under the brand Hongshi Cements on Friday, two years after it started construction of the plant. The company has planned to begin commercial production within a month. If the new cement starts arriving in the market, the price of cement is likely to drop. The plant is located at Sardi, 12km southwest of Dumkibaas in Nawalparasi district, while its main site is located at Palpa district. On Friday, it produced 2,000 tonnes of cement. The plant is expected to produce 6,000 tonnes (120,000 bags) daily within the month.
In September 2017, the Investment Board of Nepal had signed a project investment agreement worth $359.2 million (approximately Rs36.8 billion) with Hongshi-Shivam Cement, to set up a mega cement factory in Nepal. Hongshi-Shivam Cement is a joint venture between Nepal-based Shivam Holdings, which also produces Shivam brand of cement, and Hong Kong Red Lion Cement No 3, a subsidiary of Hongshi Group, the biggest building material enterprise in China. The Chinese company owns 70 percent stake in the joint venture, while the Nepali partner holds the remaining 30 percent of the company.
The company said that its plant has been equipped with modern technology so that there would not be pollution to its surroundings. “We have planned to double output to 12,000 tonnes daily in the next two years,” said Deepak Jha, the manager of the company. The factory has constructed 22km road to supply limestone from Palpa. The company will produce both clinkers and cements. Currently, there are 11 cement factories operating in the country. The company said that the market is likely to witness competition in terms of price once the new cement hits the market.
Besides, it will also reduce cement imports drastically once the factory begins producing 12,000 tonnes of cement daily.
Although, the government had assured providing necessary infrastructure like road and electricity for the company, so far nothing has been done. The company took matters into their own hands and constructed a 10 km road from Mahendra Highway of Dumkibaas to the factory site and another 22 km road from the factory to limestone quarry site in Palpa.
The company has said that it will pay Rs12 billion to the government in annual revenue if it begins running at full capacity. It will pay more than Rs2 billion in electricity charges alone. The factory will require 80MW of electricity to run at full capacity. The company also plans to export cement produced at its plant to India, Pakistan and Sri Lanka. Apart from Hongshi, other cement factories like CG Cements, Sarbottam Cements, Butwal Cements and Palpa Cements have been producing cement in Nawalparasi.