Manufacturers of construction materials on verge of collapse

KATHMANDU: Production of construction materials has declined by 50 percent since the outbreak of the coronavirus hit the country.

Manufacturers of construction materials say that the prolonged lockdown and prohibitory order have hit the market demand triggering low production. As construction works have come to a near halt during the lockdown, the market for construction materials has also got affected.

According to the Federation of Nepal Brick Industries, the unseasonal rainfall and the coronavirus have reduced brick production by 50 percent. Mahendra Bahadur Chitrakar, president of the federation, said,”Brick production is a seasonal business whereby bricks are produced in November and March/April. At first, the unseasonal rains last November affected production and later the lockdown hit production.”

He said that of the annual production of bricks worth Rs three billion, bricks worth only Rs 1.5 billion have been produced this year. The demand for bricks had been increasing by 10-15 percent annually since the last few years, however, it is likely to be affected by the low production this year.

Of the 1,250 brick factories, only 1,000 are in operation at the moment and many among them are on the verge of collapse due to the heavy loss and unfavorable condition to revive amid the pandemic.“I doubt if even 50 percent of the factories will be able to operate next year even if everything gets normal now. Many workers have not been able to return to work even after the lockdown was eased,” said Chitrakar.

He informed that all the stock in the western and far-western regions had been sold out due to the low production. The factories in the valley still have 40 percent stock of last season.

Meanwhile, Dhurba Kumar Shrestha, president of Nepal Steel Rolling Mills Association, said that production and sales of steel have decreased to below 50 percent during the pandemic. Sustaining the industry is difficult now as we depend on construction of government or private projects which have totally stopped now,said Shrestha.

As per him, only a few steel manufacturers are manufacturing 50 percent of the production.

“What’s the use of only producing if the products are not consumed in the market?” he rued. “Moreover, the products can rust if stored for a long time. We will not have much turnover in this circumstance,” explained Shrestha. “The country is facing an economic downturn at present and we have not been able to pay salaries to our employees,” he added.

Likewise,Dhruba Thapa, president of Cement Manufacturers’ Association Nepal, also said that the industry is in turmoil and they have not been able to pay the monthly salary of 400 to 500 employees working in his company.

“The Nepali cement industry has the capacity to manufacture more than the market demand but there is only around 20 percent demand at present. Compared to last year, the industry is producing only 50 percent of the products. If the condition normalizes by the time the construction season starts in November then the loss that we have faced right now can be somewhat recovered,” said Thapa.