Nepal board signs deal with Chinese company for mega cement project

Investment Board Nepal (IBN) and Hongshi-Shivam Cement, a Nepal-China joint venture company, signed project investment agreement (PIA) yesterday to set up a mega cement factory in Nepal.The agreement is the first of its kind in the country for private sector investments. The contract provides protection to the firm investment.IBN’s chief executive officer Maha Prasad Adhikari and director and general manager of Hongshi-Shivam Cement Lai Weipeng signed the PIA in Kathmandu at the presence of Nepali Finance Minister Gyanendra Bahadur Karki and Chinese ambassador to Nepal Yu Hong.As per the agreement, the company will make an investment of $359.18mn to set up a cement factory in southwestern district of Nawalparasi. This is the largest Chinese investment in Nepal’s cement industry.The joint venture industry aims to start production by 2018 with initial production of 6,000 tonnes of cement per day.The company has planned to penetrate into domestic market firstly and then it planned to export cement to India, China and other countries by increasing the factory’s capacity to 12,000 tonnes a day in the near future.The project is expected to provide high quality cement to meet the local market’s demand and improve the quality of cement production so as to bring in competition in the industry in the country.The company which has already started construction of the factory has employed more than 1,000 local workers during its construction period, according to the company.Speaking on the occasion, Karki said the realisation of the big investment from China has sent a positive message regarding overall business climate in Nepal.“The Nepali government will provide necessary infrastructure facilities to the company as committed in the annual budget,” said Karki.Adhikari said the agreement proved that Nepal has truly become an attractive investment destination for foreign investors.