The Hetauda Cement Industry, one of Nepal’s prominent state-owned enterprises, is grappling with a deepening financial crisis, leading to a halt in production since mid-October 2024. The plant initially cited equipment maintenance as the cause but later admitted financial woes have compounded the issue.
Key Issues:
1. Production Halted:
• Cement production stopped on October 1, 2024, due to the need for equipment repairs.
• Although repairs were scheduled to complete by early December, delays and financial challenges have stalled the restart.
2. Mounting Financial Strain:
• Despite production being halted, the company continues to bear operational costs, including salaries, minor maintenance, and fuel expenses.
• Electricity dues of approximately NPR 300-400 million remain unpaid, further complicating operations.
• Payments for raw materials, including coal, are overdue, blocking new supplies essential for production.
3. Workforce Impact:
• The company employs 318 staff, including permanent, daily wage, and security personnel. Most are idle due to the production halt.
• Overtime payments have been delayed, adding to employee dissatisfaction.
4. Aging Infrastructure:
• Established in 1976, the factory’s equipment, including the critical clinker machine, is outdated and frequently breaks down.
• Technical Chief Kameshwar Mandal stated, “While most repair work is complete, some tasks remain, and production will resume shortly after.”
5. Production Capacity vs. Reality:
• The plant has a daily production capacity of 16,000 cement bags. However, during its last operational phase in August-September 2024, it produced only 65,000 bags due to ongoing challenges.
6. Future Plans:
• According to Chairman Narendra Bhandari, the repair process is in its final stages, involving skilled workers from India.
• Once repairs are completed, the company plans to resume production immediately, despite financial constraints.
Historical Significance and Challenges:
Hetauda Cement Industry began production in 1986 and was once a symbol of Nepal’s industrial ambitions. However, decades of underinvestment, management inefficiencies, and outdated technology have hindered its potential.
The government and stakeholders must address the financial and operational challenges urgently to ensure the revival of this historic industry, which plays a critical role in Nepal’s infrastructure development.
Conclusion:
As repairs progress, optimism for a quick resumption of operations remains. However, without sustainable financial strategies and modernization efforts, the long-term viability of Hetauda Cement Industry hangs in the balance.