Udayapur Cement Factory mired in mismanagement

By Bhakti Bilas Pokhrel,Gaighat, Nov. 28: The government-owned Udayapur Cement Factory has been shut for the past three months. The plant, located in Jaljale of Udayapur district, halted production due to financial constraints that stalled a planned capacity expansion project involving the installation of an RSP (Reinforced Suspension Preheater) system.

The RSP is a system used in cement production to boost clinker output while cutting down on heat consumption. It features a suspension preheater equipped with a swirl burner and swirl calciner.

Udayapur Cement had introduced the expansion plan nearly two years ago to increase production and address rising market demand for high-quality cement. 

The factory aimed to upgrade its existing plant to boost daily production from 800 tonnes to 1,200 tonnes by adding 400 tonnes of capacity with the RSP system. However, the project has been on hold due to a lack of funds, according to Acting General Manager of the company, Mahesh Sah.

The RSP system was intended to enhance the output of the existing rotary kiln without requiring new large-scale machinery. It would also operate on a digital system without additional electricity requirements, reduce coal consumption, and improve clinker quality. 

Tika Bahadur Kunwar, former chief of the Mechanical Department of the industry and a member of the capacity expansion committee, highlighted that the technology would recycle hot air from the cooler back into the SP Tower, significantly improving energy efficiency.

According to him, the system would also accelerate the calcination process, increasing the calcination rate from 40 per cent to over 60 per cent. Application of the proposed plan was expected to generate an additional annual profit of Rs. 1.05 billion.

On the contrary, the factory is now facing severe challenges, its employees have not received salaries for the past four months. Key equipment, including mills, fans, motors, and liners, are deteriorating, affecting operational efficiency. 

In addition, the factory has substantial liabilities, including Rs. 150 million in unpaid employee contributions to the Employee Provident Fund, Rs. 400 million owed to retired staff, Rs. 610 million to suppliers, and Rs. 330 million to the Nepal Electricity Authority.

The Ministry of Industry has been criticised for ignoring requests for financial support, including a loan of Rs. 50 million, and failing to appoint the General Manager or Chairman of the Board of Directors. 

Acting General Manager Sah said that despite having significant limestone reserves and the capacity to produce 16,800 bags of cement daily, mismanagement and financial troubles have left the factory in dire straits.