Shahil Agrawal, President of Nepal Steel Rolling Mills Association.
KATHMANDU: The Nepal Steel Rolling Mills Association has lauded the Budget Replacement Bill brought by the government saying it would encourage domestic production of steel rods thus creating an industrial environment in the country.
“It is a welcome step to bring down the customs duty on sponge iron imports,” a statement issued by the Association has said.
This, according to the Association, will enable the production of billets through raw materials within the country thus expanding investment and employment opportunities.
The new arrangement in the budget will add an additional Rs 6 billion to the rolling mills and rod industry in the country through domestic capital and skill.
The Association has said that the decision would create an industrial environment in the country, protect the foreign exchange as well as have a positive impact on revenue growth.
The government’s zero-duty tariff on the raw material sponge required to produce billets in the country through the budget will lead the industries on the path of self-reliance by expanding investment and producing billets.
The new system also supports the consumption of electricity being produced in the country, it added.
At present, Nepal has an annual production capacity of about 1.6 million tons and the industry can be operated to produce 80 to 95 percent of the installed capacity, according to the statement.
In addition, the customers will directly benefit from the production of billets in the country, it said.
The new arrangement will add an average investment of Rs. 6 billion and will create an additional 3,000 jobs in the country.
The Association has also said that with the addition of investment, the capacity of the industry will be expanded and 220 MW of electricity will be consumed immediately.
It also said that the indigenous capital will be saved by reducing the consumption of 15 million liters of furnace oil and replacing it with electricity. This will save a total of Rs 450 crore, according to the statement.
The Association has also said that the price of the rod can be reduced to Rs. 3 per kg immediately and will benefit the direct customers.
It has also said that Nepal has been producing high-quality rods within the country by fully controlling the quality as per the criteria set by the government.