Industrialists have reported the closure of 11 cement factories and two steel industries in Koshi Province, attributing the shutdowns to a significant decline in demand caused by the ongoing economic slowdown.
Koshi Province is home to 14 registered cement factories: seven in Jhapa, four in Morang, one in Sunsari, one in Dhankuta, and one government-owned factory in Udayapur. However, only Mansa Cement and Himalaya Cement in Jhapa and Saptakoshi Cement in Morang remain operational, while the rest have ceased production.
Similarly, only five of the province’s seven steel industries are currently functioning.
Nepal Ultratech Cement Industry in Budhiganga Rural Municipality, with a daily production capacity of 1,000 metric tons and an investment of Rs 2.5 billion, has been closed for a year. According to its operator, Manish Maru, a lack of market demand and government support for exporting cement to India forced the closure, which also led to the loss of direct jobs of 100 people.
Maru explained that while clinker-producing industries can sell cement at lower prices domestically and to India, those dependent on buying clinker face higher production costs. He said that market demand has dropped to just 10% of previous levels, leaving 11 out of 14 cement factories inoperable.
He emphasized that reopening these industries would require clear government policies, particularly regarding export facilitation. Maru suggested the government should eliminate the hassle of obtaining a Bureau of Indian Standards (BIS) certificate for exports to India and introduce export subsidies to make Nepali cement competitive in the Indian market. Currently, the total production capacity of cement factories in Koshi Province is 11,000 metric tons per day, but the actual daily production has plummeted to just 1,000 metric tons.
Ashish Goyal, the operator of Saptakoshi Cement Industry, reported operating at just 20% of capacity. Despite a production capacity of 500 metric tons per day, his factory is producing only 100 metric tons due to reduced demand in the domestic market, an economic slowdown, and stagnation in the construction sector.
The steel industry in Koshi Province is also grappling with declining demand. Two steel plants—Aarti Strips and Pathibhara Steel in Birtamod—have ceased production entirely. The remaining five factories, including Premier, Hulas, Pashupati, Kamala, and Swastik Iron, are operating at just 20% of capacity.
Saurabh Sharda, the owner of Premier Steel, stated that the combined daily production of these five operational factories is now 1,000 metric tons, compared to 2,600 metric tons when all seven industries operated at full capacity.
Sharda noted that although Nepali steel plants have obtained BIS certification from India, they struggle to compete with Indian steel due to higher costs. He added that government subsidies could facilitate exports and ease the challenges faced by the industry.
Sharda also highlighted a decline in market growth. He explained that the steel industry previously enjoyed annual growth of 20%, but the current slowdown has put investments at significant risk.
