Chapter I

Introduction
Cement is a fine mineral powder manufactured with very precise processes. Mixed with water,
this powder transforms into a paste that binds and hardens when submerged in water. Because
the composition and fineness of the powder may vary, cement has different properties depending
upon its makeup.
Cement is the main component of concrete. It's an economical, high-quality construction material
used in construction projects worldwide.
Cement is made by grinding together a mixture of limestone and clay, which is then heated at a
temperature of 1,450C. What results is a granular substance called "clinker," a combination of
calcium, silicate, alumina and iron oxide.
Technology
Cement Manufacturing Process

1.) Limestone is taken from a quarry. It is the major ingredient needed for making cement.
Smaller quantities of sand and clay are also needed. Limestone, sand and clay contain the four
essential elements required to make cement. The four essential elements
are calcium, silicon, aluminum and iron.

2.) Boulder-size limestone rocks are transported from the quarry to the
cement plant and fed into a crusher which crushes the boulders into
marble-size pieces.

3.) The limestone pieces then go through a blender where they are added
to the other raw materials in the right proportion.

4.) The raw materials are ground to a powder. This is sometimes done
with rollers that crush the materials against a rotating platform.

5.) Everything then goes into a huge, extremely hot, rotating furnace to
undergo a process called "sintering". Sintering means: to cause to
become a coherent mass by heating without melting. In other words, the
raw materials become sort of partially molten. The raw materials reach
about 2700 F (1480C) inside the furnace. This causes chemical and physical changes to the raw
materials and they come out of the furnace as large, glassy, red-hot cinders called "clinker".

6.) The clinker is cooled and ground into a fine gray powder. A small
amount of gypsum is also added during the final grinding. It is now the
finished product - Portland cement.
The cement is then stored in silos (large holding tanks) where it awaits distribution.
The cement is usually shipped in bulk in purpose-made trucks, by rail or even by barge or ship.
Some is bagged for those who want small quantities.

Chapter II
Literature Review
According to the Cement Manufacturers Association of Nepal (CMAN), the domestic cement
industry has an installed production capacity of 5.58 million tonnes annually which is slightly
higher than the annual demand of 5.42 million tonnes. However, cement manufacturers say their
plants could have utilized their full capacity except for supply side constraints and government
apathy.
However, this hasnt stopped the private sector from entering this sector in a big way. Currently,
there are 42 factories in operation producing 3.90 million tonnes of cement annually. Local
production fulfils about 72 percent of the requirement and the rest is met by imports from India.
Nepal produces OPC, PPC and PSC cement, of which OPC is preferred these days.
Out of the 42 factories, only 10 also produce clinker, a major raw material used in cement
production. Nepal used to depend on India for 90 percent of its clinker requirement. However,
with more factories now setting up clinker production units after acquiring limestone quarries,
imports from India will decline in the coming years.
With these upcoming projects and capacity enhancement at a number of existing cement
factories; the country will be able to substitute around 80 percent of its cement imports from
India within the next few years.

Chapter III
Research Methodology
The report would not be completed without the help of many people for collection of
data. The information is collected from the newspaper, website related of the
cement industry, website of and other various magazines. The report is based on
the seminar and surfing of internet during the preparation of the report.

Chapter IV
Observation and Analysis
Table no. 1 Some Cement Industries of Nepal
Sno
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Name of Cement Company

Hetauda Cement Industries Ltd.
Udayapur Cement Industries Ltd.
Shree Maruti Cement Ltd.
J.K White Cement Works
Cosmos Cement Industries Pvt. Ltd.
Buddha Cement Pvt. Ltd.
Jay Manglam Cement (P) Ltd.
Grasim Industries Ltd.
National Cement Pvt. Ltd.
Dynasty Industries Nepal Pvt. Ltd.
Triveni Group
Chachan Impex
KC Super Cement
Shree Pashupati Cement (P) Ltd.
Butwal Cement Mill (P) Ltd.

Address
Lamshure, Hetauda
Jaliale, Udayapur
Mirchaiyaa
Head off: Kuleshwor, Ktm
Dhanusha, Janakpur
Head off: Tripureshwor, Ktm
Head off: Thapathali
Head off: Kathmandu
Head off: Tripureshwor, Ktm
Head off: Ravibhawan, Ktm
Adarsha Nagar, Birgunj
Mahabir road, Birgunj
Head off: Ktm Factory: Birgunj
Head off: Indrachwok, Ktm
Swathi-4, Nawalparashi
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Composition of cement:
The ordinary cement consists of three ingredient predominantly. They are clay or alumina, silica
and lime. Besides, these ingredient most cement contain small amountof iron oxide, magnesium
oxide, sulphur trioxide, alkalies and other materials. The typical percentage of these constituents
in good ordinary cement may be as follows.
Table no 2 Name of Constituent
Sno.
1
2
3
4
5
6
7
8

Name of Constituent
Almunia or Clay (Al2O3)
Silica (SiO2)
Lime (CaO)
Iron oxide
Magnesia (MgO)
Sulphur Trioxide
Alkalies (Soda and Potash)
Calcium Sulphate (CASO4)

Typical Percentage
5%
22%
62%
3%
2%
1%
1%
4%

Limit of %
3-8%
17-25%
60-67%
0.5-6%
0.1-4%
1-3%
0.2-1%
3-5%

A supply chain is a system of organizations, people, activities, information, and resources

involved in moving a product or service from supplier to customer. Supply chain activities
transform natural resources, raw materials, and components into a finished product that is
delivered to the end customer. In sophisticated supply chain systems, used products may re-enter
the supply chain at any point where residual value is recyclable. Supply chains link value chains.
The Council of Supply Chain Management Professionals defines supply chain management as
follows: "Supply Chain Management encompasses the planning and management of all activities
involved in sourcing and procurement, conversion, and all logistics management activities.
Importantly, it also includes coordination and collaboration with channel partners, which can be
suppliers, intermediaries, third-party service providers, and customers. In essence, supply chain
management integrates supply and demand management within and across companies. Supply
Chain Management is an integrating function with primary responsibility for linking major
business functions and business processes within and across companies into a cohesive and highperforming business model. It includes all of the logistics management activities noted above, as
5

well as manufacturing operations, and it drives coordination of processes and activities with and
across marketing, sales, product design, and finance and information technology."
A typical supply chain begins with the ecological, biological, and political regulation of natural
resources, followed by the human extraction of raw material, and includes several production
links (e.g., component construction, assembly, and merging) before moving on to several layers
of storage facilities of ever-decreasing size and increasingly remote geographical locations, and
finally reaching the consumer.
Many of the exchanges encountered in the supply chain are therefore between different
companies that seek to maximize their revenue within their sphere of interest, but may have little
or no knowledge or interest in the remaining players in the supply chain. More recently, the
loosely coupled, self-organizing network of businesses that cooperates to provide product and
service offerings has been called the Extended Enterprise.
Guaranteeing acceptable conditions in a global supply chain can be a complex challenge. As part
of their efforts to demonstrate ethical practices, many large companies and global brands are
integrating codes of conduct and guidelines into their corporate cultures and management
systems. Through these, corporationsare making demands on their suppliers (facilities, farms,
subcontracted services such as cleaning, canteen, security etc.) and verifying, through
social audits, that they are complying with the required standard. A lack of transparency in the
supply chain is known as mystification, which bars consumers from the knowledge of where
their purchases originated and can enable socially irresponsible capitalist practices.

Cement Manufacturing Process

6

From suppliers supplier (Upstream) to customers customer (Downstream)

Cement Manufacturing Process

Supplier
Suppliers Suppler

Fig 1:-Upstream of Supply Chain

Distribution process to customer

Distribution
FactoryTransportati
Transportati
Channelson
on 7
(Value
Custome
(Distributors, Wholesalers,
Change)
(Roadway)
(Roadway)rs
Fig 2:- Downstream
of Supply Chain
Retailers)

Chapter VI: Result and Discussion

Current Trends in Supply Chain of Cement Industry

Even though there is lots of technology introduced in market, in Nepalese context the supplier
side is still traditional and movement is still on defeat basis. This traditional and defeat is still on
due to huge transportation and finding mines depends upon government infrastructure and their
rules. Even having these problem and challenges there is drastically change in distribution.
Pachakanya cement industries has shown example of JIT system in Nepal. No distribution, no
wholesaler, no retailer are need. Due to which cost has been decrease and supply has become
more faster than before.
Direct from manufacturing company to customers site concept in knew for Nepal has become
more successful than other system of supply chain. Creating customer on the spot and supplying
the product on demand has brought chain of demand and supply in just a small gap of time.
Only Panchakanya has introduced this system and other industries has failed to do so. If there is
more industry who uses JIT system then there can be drastically change in economy of Nepalese.

Fig 3:- JIT of Panchakanya

Challenges in Cement Industries

9

Against a backdrop of Nepals falling competitiveness in the manufacturing sector, the cement
industry has been flourishing despite all sorts of problems. There has been a significant growth in
the countrys cement sector in the last three years.
With a rise in domestic production, the countrys imports of cement and clinker, a raw material
used in the manufacture of cement, have dropped markedly. According to the Trade and Export
Promotion Centre (TEPC), the rate of growth in cement imports has declined in the last fiscal
year. Nepal imported cement worth Rs 4.63 billion in fiscal 2010-11, representing an increment
of 4.1 percent. In fiscal 2009-10, cement imports grew 6.9 percent. The decline in the rate of
growth in the import of both cement and clinker reflects Nepals progress towards selfsufficiency in cement production.
The major problem, according to Nepali manufacturers, is timely delivery of clinker from India.
Regular supplies of raw materials plays a very crucial role in smooth operation of this industry,
but we are unable to import clinker from India as per our need, said Ajay Jatia, executive
director of Jagadamba Cement Industries. Time and again, problems are created at the railways
by locals and state governments of India which directly affect our imports.
The high import duty levied by the government on clinker has weakened the competitiveness of
Nepali cement in terms of price, said manufacturers. The government has been continuously
increasing the customs duty on clinker ignoring its effects on domestic cement manufacturers,
said Tara Pokhrel, managing director of Agni Cement Industries. The government this year
increased the customs duty on clinker to Rs 2,200 per tonne from last years Rs 1,500 per tonne.
Under such circumstances, Nepali cement producers are losing their competitiveness to Indian
manufacturers, and they have asked the government to roll back the duty. Likewise, domestic
industrialists have been complaining about the high duty levied on dry fly ash, another raw
material required to produce cement.
Along with the high customs duty and supply-side constraints, manufacturers are facing
problems on this side of the border too. The major problem at this point of time is the power
crisis due to load-shedding. Manufacturers say that the cost of production increases significantly
when they switch to diesel power. The operation cost increases more than two-fold when we use
diesel power to run our plant, said Niraj Singh, marketing manager of Brij Cement Industries.
10

Also, the plant and machinery used in cement production are heavy, and it is technically
unviable to operate them with diesel power. They also complained about
unavailability of diesel in desired quantities.

The syndicate system in transportation is another big problem for the domestic cement industry.
Fig 4:- Chart of Central Bureau of Statistics

We are not getting a sufficient number of trucks to supply our finished goods to the targeted
location, said Suresh Jaisawal, sales manager at Brij Cement Industries. The cost associated
with transportation is equally high. Manufacturers complain that even with enough production
and demand, they are unable to supply their products to the market due to unavailability of
transportation.

11

Chapter VII
Findings, Conclusion and Recommendations
In recent times Blue Circle Cement has won a number of awards for its Quality Improvement
Cycle and Human Resources initiatives. What the company has done is to create an empowered
workforce which has become the driving force for superior performance coupled with the
utilisation of advanced technologies. It has taken Blue Circle Cement ten years to achieve this
huge change in culture and this could not have taken place quickly. It has needed time but the
achievement in winning Quality Awards is recognition from external experts that Blue Circle
Cement

is

getting

12

it

right.

References
books.google.com.np/books?isbn=0070221634
www.binodpandey.wordpress.com
http://en.wikipedia.org/wiki/Supply_chain
http://www.slideshare.net/avdlink/nepal-cement-industry-synopsis
http://www.ekantipur.com/the-kathmandu-post/2012/05/01/money/domestic-cement-industry-on-the-path-to-self-sufficiency/234411.html
http://businesscasestudies.co.uk/

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