The state-owned Hetauda Cement Industry is facing a severe financial crisis due to the lack of sustainable financial resources, making it difficult to purchase coal on time and pay employees their monthly salaries and allowances, which have remained unpaid for the past year.
According to Acting General Manager Shivnarayan Sah, the financial strain has been exacerbated by the collapse in cement sales. Previously, the industry’s high-quality cement was distributed in major markets including Kathmandu, Birgunj, Hetauda, Narayangadh in Chitwan, Pokhara, Dhangadhi, and Biratnagar. However, sales have now virtually come to a standstill.
Speaking on Monday, Sah said the company is holding direct discussions with dealers, local consumers, and heads of development projects in Kathmandu, Hetauda, and other cities to boost sales. He added that the price of cement would also be reduced by a certain percentage to attract buyers.
Assistant Manager of the Administration Division, Bikash Shrestha, said the factory currently has around 70,000 to 75,000 bags of cement already packed and ready for sale. According to him, the market price of each bag of cement produced by the industry is Rs 724.
Higher Prices Affecting Sales
Former President of the Makwanpur chapter of the Federation of Nepali Journalists, Mahendra Shrestha, said that cement produced by Hetauda Cement Industry costs more than Rs 70 per bag compared to cement manufactured by private sector companies in major cities such as Hetauda, Kathmandu, Birgunj, and Pokhara.
Local consumer Sitaram Bartaula of Hetauda Sub-Metropolitan City-11 said the higher price could be one of the reasons behind declining sales.
Employees Await Salaries
Assistant Manager Shrestha stated that the industry needs approximately Rs 95.7 million every month, including provident fund contributions, to pay salaries and benefits to all employees. However, due to financial constraints, the company has been unable to provide regular payments.
He said the management plans to first use the revenue generated from cement sales to clear employees’ salary dues. In the second phase, efforts will be made to procure 3,000 metric tons of coal.
According to him, employees have not received regular salaries, allowances, or medical expenses for the past year because of the absence of a reliable financial mechanism.
Reduced Production Capacity
Industry management said the factory currently employs 134 permanent staff, 53 contractual and security personnel, and 70 workers hired through contractors.
Although the plant originally had the capacity to produce 18,000 bags of cement per day, aging machinery and equipment have reduced daily production to around 12,000 bags, Shrestha said.
Established in 1976
Hetauda Cement Industry was established in Lamsure, Hetauda, in 1976 (B.S. 2033) by the then His Majesty’s Government. The government invested Rs 1.5 billion in the project with financial assistance from the Asian Development Bank.
Once regarded as one of Nepal’s leading cement manufacturers, the industry is now struggling to sustain operations and restore its position amid mounting financial challenges.
