October 5: The profit of the state-owned Udayapur Cement Industries Limited has declined by Rs 25 million on a weekly basis due to irregular power supply.

According to Nabal Kishor Shah, deputy general manager of the company, though Udayapur Cement is still in profit in terms of production and distribution, its profit has been declining as Nepal Electricity Authority (NEA) has not been able to supply electricity to the production plant regularly.

Shah said that it is not possible for the company to earn the same amount of profit that it earned last year due to the short supply of electricity. The company’s profit totaled Rs 250 million in the last fiscal year.

 “NEA had agreed to make power available 24 hours a day. But, the company has not been able to produce as much cement as expected because the NEA has been supplying power not more than 15 hours a day in average,” said Shah.

“The industry has to bear a loss of Rs 600,000 if the power cut continues for an hour. Such loss ranges from Rs 2.5 million to Rs 3 million on daily basis,” he said, adding, “Sometimes, power resumes after two minutes while at other times the disruption lasts for two hours.”

The industry had been producing 650 tons of cements on a daily basis but with irregularity in power supply, it has been producing only 400 tons of late. Shah said if the power supply does not face any disruption, the industry has a capacity to produce 16,000 sacks of cement every day. The industry operates 20 to 25 days in average in a month.

The irregularity in power supply has causes technical glitch in functioning of an important component of the cement plant. Heating and cooling of the plant causes breakage and failure of the components of the plant, informed an industry source.

Chief of the maintenance and supply department, Mahesh Prasad Kafle, said that it takes 15 days to fix the machine. The industry has to bear a loss of Rs 100 million if the industry shuts down for 15 days.

Kafle said that the regular supply of power ensures production of 35 tons of cement every hour. “There is high demand for cement at the moment but we are not able to fulfill it as the company has not been able to produce that quantity because of power disruption.”  He said there is demand of 15,000 sacks of cement on a daily basis.

The company has been paying twice the regular rate to NEA for uninterryptible power supply during peak hours but the state-owned utility has not fulfilled the agreement.  

The time period between 5 pm to 6 am is considered as peak hours. NEA charges Rs 17.50 per unit to such customers through dedicated feeder. The company pays a bill amounting Rs 2 million on a monthly basis. “Despite this, the power supply is not regular,” Kafle further added.