Chinese-invested cement industry in Nepal reaches 'drowning' stage: Report

Chinese-invested Hongshi Cement Industry, which is Nepal's largest cement company, has reached a stage of "drowning due to its internal disputes", EPardafas reported, adding that Nepalese investors left the board of directors after the economic situation of the industry was in crisis due to the "arbitrary decisions of Chinese investors".

Chinese-invested Hongshi Cement Industry, which is Nepal's largest cement company, has reached a stage of "drowning due to its internal disputes", EPardafas reported, adding that Nepalese investors left the board of directors after the economic situation of the industry was in crisis due to the "arbitrary decisions of Chinese investors". Further, according to the news report, Nepalese investors have said the economic situation of the cement industry is "very critical and can sink anytime". Hongshi Cement Industry was started with an investment of USD 350 million, the report stated, adding that Sharda Group and others had a 30 per cent stake in the cement industry in addition to Chinese investors.

Sharda Group Chairman Shiv Ratan Sharda and fellow investor Bishwonath Goyal were the board directors of Hongshi. However, Nepalese investors left the board of directors as a crisis gripped the cement industry owing to the alleged arbitrary decisions of the Chinese investors. The report quoted an investor as saying that Chinese investors, for some time now, have been selling cement at a low price to capture the Nepalese market. He stressed that the amount is yet to be raised in the market and it was difficult to pay salaries to the employees, as per the news report. Nepalese investors left the board of directors of Hongshi as the financial responsibility of the industry fell on them, EPardafas reported, adding that NMB Bank has given a loan of 6 billion to the cement industry while Rastriya Banijya Bank Prabhu Bank, Everest Bank, and Nepal SBI Bank have also given huge loans to it.

Banks have started holding serious discussions as the condition of the industry has worsened, EPardafas reported. Chinese investors have been selling cement at cheaper rates to capture the Nepalese cement market, the report said, adding that it is part of a strategy to remove other companies from the market. However, the Chinese strategy has weakened the financial situation of the Hongshi cement industry.

The company's employees have started protesting due to non-payment of salary, EPardafas reported, adding that the Chinese-invested cement industry has not paid salaries to employees and truck drivers for six months. Further, as per the news report, there is also a complaint that the Chinese-invested cement industry has not fulfilled its commitment to locals at the time of its establishment. (ANI)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)