Udyapur Cement Industry in deep financial crisis, production stuck in warehouses

KATHMANDU: The state-owned Udyapur Cement Industry has plunged into a severe financial crisis, with production worth millions of rupees lying unsold in warehouses due to its inability to procure packaging materials.

According to the industry, cement worth around Rs 63.5 million has remained stranded as the company has been unable to purchase packaging sacks required for distribution.

One of Nepal’s oldest state-owned industrial enterprises, the Udayapur Cement Industry is currently struggling with financial constraints, managerial inefficiency, and labor unrest.

Officials said the industry currently has around 82,000 sacks worth of cement in stock. Of this, approximately 50,000 sacks of finished cement are lying idle in warehouses, while clinker sufficient to produce an additional 27,000 sacks is also in stock.

Despite having production capacity and raw materials, the company has been unable to supply cement to the market due to a shortage of packaging bags, further weakening its financial condition.

Industry administration chief Gambhir Jung Khattri said the company lacks sufficient funds even to purchase cement sacks required for packaging.

He estimated that the value of the unsold cement, calculated at Rs 775 per sack, stands at approximately Rs 63.5 million.

Khattri further said the industry is not facing technical problems but has effectively reached a standstill due to financial constraints.

The production department has repeatedly urged management to arrange packaging materials, but officials say no effective action has been taken.

Due to delays in packaging and management failures, around 5,000 sacks worth of cement stored in the packaging unit have reportedly been completely damaged.

Meanwhile, workers and employees have complained that they have not received salaries for the past 15 months, forcing them into protest.

The combination of financial crisis, maintenance issues, labor unrest, and weak management has left the industry largely non-functional, raising serious concerns among locals and stakeholders about its future.