SteelMint Group organized a two day Trade Summit at Kathmandu, Nepal which was held on 17&18 of May .The event was presided by the Finance Minister of Nepal Dr Yuba Raj Khatiwada and many other prominent industrialists including MD of Shanker group (Jagdmba Steels) . Shahil Agrawal, MD of Panchakanya group, Pradeep Shrestha and CEO of Investment Board of Nepal, Maha Prasad Adhikari and others.
The trade summit was an endeavor to study the growth trajectory of steel, cement, and power sectors in Nepal and its future outlook. Also, to analyse the different opportunities and challenges faced by the industry.
Addressing the gathering, Finance Minister Dr Khatiwada welcomed the private sector invest in Nepal saying that “Nepal government is always ready to work with private sector for the development of infrastructure project along with the concept of modern Nepal”.
He also added that we are not only importing raw material for vital industries, but we are also going to produce them in our country. He further said that Nepal government cannot do the mining work by itself and he sought support from the private players.
President of Cement Manufacturing Association of Nepal Dhruba Thapa shared his view on conditions and situation of cement market of Nepal. He said, “Post-earthquake, the growing construction activities has greatly impacted the demand for cement positively”.
The exhibition was inaugurated by President of Nepal Engineer’s Association Er. Hare Ram Shrestha. The Summit was attended by Steel manufactures, Billets and Wire rod suppliers, Cement manufacturers and Power Producers, Semi-finished steel buyers from India, Nepal, China, and other countries; more than 320 participants were present during the summit.
The Agenda of Nepal Trade Summit:
The agenda of this summit was to act as a platform to facilitate trade interactions amongst various stakeholders and to discern the growth drivers of industrial progress in Nepal. This summit was also focused to interpret the implications of the growth of steel sector in adjoining countries and to learn about the new opportunities in steel, cement & power sector of Nepal.
The key takeaways of the summit:
1. The government of Nepal is willing to invite the private sector to invest their funds in Nepal for the development of infrastructure.
2. After the earthquake in Nepal on April 25, 2015, the demand for steel and cement has drastically increased in the country. However, the infrastructure and resources presently available in Nepal are inadequate to match the rising demand.
3. The billet imports to Nepal in the last two years have significantly doubled. In the year 2015, the Billets imported by Nepal was reported around 450,000 MT. But according to the new reports, in 2016 and 2017 billet imported by Nepal crossed over 10,00,000 MT, which clearly indicates the increasing construction activities in the country.
4. SteelMint learned that the current demand of steel in Nepal is around 1.5-1.6 million tonnes and it is expected to grow at an annual rate of 8-10% in coming years. Some industrial experts are also predicting that by the end of 2018 it will cross 2 million tonnes.
5. The current demand of cement in stabilized political environment shows an upward trend of cement consumption in the domestic market. Before the earthquake, the total cement production of Nepal was around 4 million tonnes per year. However, according to cement industry experts, the annual projected demand is expected to increase and cross 7 million MT in upcoming years.
Some experts also claimed that in the next couple of years the demand is expected to surge by 25% annually due to construction activities. Around 80 percent of Nepal’s cement demand is being fulfilled by domestic production and the remaining 20 percent is imported mainly from India.
6. Presently, there are around 20-22 Rolling mills capacities, to meet the steel demand of Nepal and there is a huge market and scope in this industry for new Rolling mills along with the support of government of Nepal.
7. Nepal Electricity Authority (NEA) has supplied 1030 MW peak power, which is also considered as the highest electricity supply in the history of Nepal. Out of 1030 MW, NEA power plant supplied 420 MW, Independent Power Producers supplied 270 MW and 340 MW was imported. It was assumed that Peak Demand was around 1330 MW, out of which 300 MW was load shedding.
Managing Director of Nepal Electricity Authority Kulman Ghising said after the completion of the 456-MW Upper Tamakosi Hydroelectric Project and some other projects by the private sector, we will be able to sustain the supply during the winter as well. Since the Upper Tamakoshi will start generating power by the end of this year and some private sector projects will also be completed, we have a plan to end load shedding in the industrial sector as well.
“We decided to end load-shedding formally due to rise in water level in the rivers boosting electricity production from the run-of-the-river hydropower projects, managing available electricity better and increasing the import of electricity from India”, he added.
The industrial corridors in Birgunj and Biratnagar are already getting uninterrupted power supply on a trial basis.
The panel discussion focused on upcoming challenges for steel, cement, and power sector in Nepal. During the discussion, all the panelists agreed that Logistics is the biggest challenge for growth and development of any sector in Nepal.
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