KATHMANDU: Cement producers have demanded that the government removes some ‘impractical’ provisions in the recently issued Forest Regulations 2022, which they say, will increase the cost of domestic cement. Issuing a press statement, the Nepal Cement Producers Association, which is a representative organization of domestic cement industries, also has stated that the price of cement produced in the country will go up to weaken its competitive edge and push up the price of cement in the local market. With the new regulation coming into force, the prospect of exporting Nepali cement has ended as the country is gaining self-sufficiency in cement production.
The new regulations have designated limestone- a key ingredient for cement, as a mineral forest product, for which cement producers have to pay additional royalty. The Association has also stated in the press statement that other new provisions in the regulations have disincentivized the domestic producers, who have been competing with a number of international cement brands.
The statement also reads the new regulations are all set to increase the cost of production which will consequently push up the price of cement and construction costs as well as shuts the door for exporting domestic cement to the international market. The Ministry of Forestry and Environment has imposed taxes and other impractical provisions through the regulations in violation of the existing Minerals Act, 2042 and Regulations, 2056 related to mining in the Forest Regulations. The Association demanded that the government withdraw the new provisions in the regulations to create an environment to flourish cement industries in the country.
In order to make the export-ready cement industries competitive in the international market, the government has granted an 8 percent subsidy on export through the current budget. In addition, it has been arranged to give a rebate of up to 15 percent on the electricity tariff from cement producers which consume electricity worth Rs 100 million annually. Nepali cement producers had planned to export cement worth Rs 150 billion immediately following the announcement of the current budget that has offered crucial incentives to local cement producers.