Country gets FDI worth $210m
KATHMANDU:
China’s largest cement manufacturer, Hongshi Group has partnered with Nepali cement manufacturer Shivam Cement to enhance the capacity of Nepal-based cement plant in a joint venture.
The investment of about $210 million pledged by Hongshi is the largest investment in a single project by a privately-owned firm from China.
Both parties signed an agreement in the presence of Minister for Finance Ram Sharan Mahat, here today. The agreement was signed by Vishwonath Goel, chairman of Shivam Holdings, a subsidiary of Shivam Cement, Nepal, and Xu Youyuan, executive vice president of Hongshi Holdings, a subsidiary of Hongshi Cement, China.
A total of $300 million will be invested in the project over three years. Seventy per cent of the project cost will be foreign direct investment (FDI) and 30 per cent will be equity investment by its local partner.
Similarly, Shivam Cement will be renamed Hongshi-Shivam Cement.
After the completion of the proposed project, the cement plant will produce 6,000 tonnes of cement per day. Currently, the capacity of Shivam Cement is 1,250 tonnes a day.
The Shivam Cement plant was established in 2009 and the company has its own limestone mine. Its capacity will be also expanded to mine about 10,000 tonnes of limestone per day, as per Vishwonath Goel, chair of Shivam Holdings. “We have a target to export cement in the long run.”
The government has been extending facilities of access road from factory to mine and electricity grid connection in the plants. The proposed plant needs 50 megawatt to run operations.
Speaking on the occasion, Mahat said the agreement between Hongshi and Shivam is an example of Chinese investors’ growing interest in Nepal. He also urged investors to reap the benefit of duty free, quota free market access extended by neighbouring India and China by exporting cement produced in Nepal.
Minister Mahat further informed that the government is planning to introduce a regulation whereby environmental impact assessment needs to be concluded by six months.
Likewise, Ambassador of China to Nepal Wu Chuntai said that Chinese investment has been gradually increasing in various areas like, hydropower, hotel, hospitality and civil aviation, among others. He added that as Nepal was doing a lot to create conducive business environment, FDI commitment has been growing substantially since the recent past.
In the programme, Investment Board Nepal CEO Radhesh Pant emphasised that the government should provide seamless process for foreign investment in the country in a bid to facilitate investors.
Source: THT
