Chinese company to invest in Nepal's cement industry

KATHMANDU: A Chinese company today signed a deal to invest $ 300 million in Nepalese cement industry, making it the largest foreign direct investment (FDI) in the country so far.

China's Hongshi Holdings Group signed a joint venture agreement with Shivam Holdings Nepal to set up a Rs 30 billion ($ 300 million) cement factory.

Under the agreement the Hongshi Holdings will invest Rs 21 billion (70 per cent) in the project while the Nepali partner will put Rs 9 billion.

The joint venture will be named Hongshi-Shivam Cement Private Limited.

An agreement to this effect was signed by Vishwonath Goel, chairman of Shivam Holdings, and Xu Youyuan, executive vice-president of Hongshi Holdings, in Kathmandu today.

"We aim to start production within next three years if the government clears the process and electricity is made available on time," said Goel.

Chinese Ambassador to Nepal Wu Chuntai said the largest FDI commitment from China will help continue promoting the bilateral friendship and partnership.

"We hope this agreement conveys a positive message to prospective Chinese investors," said Chuntai.

The Hongshi-Shivam JV will produce 6,000 tonnes (120,000 sacks) of cement per day.

The new plant will provide direct employment to more than 2,000 people.

The plant will help Nepal become self-reliant in cement manufacturing, said Youyuan.

The annual demand for cement at present is estimated at 3.5 million tonnes while the country produces 2 million tonnes on its own.