(Photo Source: Google)
(Project Submission Date: 15th December, 2015)
CHAPTER III: RESULTS (Contd.)
Results from telephone survey
A telephone survey was conducted for altogether 37 construction sector industries as well as professional associations including brick, cement, reinforcement steel bar, CGI sheets and GI wire industries throughout the country to estimate their production capacity of construction materials before the Gorkha Earthquake. The results are briefly explained below.
- As per FNBI’s estimation there are a total of 850 registered brick industries in Nepal. Around 108 brick factories residing inside Kathmandu valley produced around 430 million bricks while nearly 3 billion bricks were produced by 742 brick industries outside the valley. The total estimated annual production capacity was around 3.4 billion bricks before the earthquake. Please see Table 15.
Table 15. Brick industries and their production capacity in Nepal
- As per CMAN there are 46 cement industries producing a total of around 4 million MT cement every year before the earthquake. Major 16 cement industries had the annual production capacity of around 3.5 million MT cement nationwide. Please see Table 16.
Table 16. Factory location and production capacity of Cement industries in Nepal
- Out of the 16 reinforcement steel bar industries nationwide, 12 factories produced around 849,000 MT of steel bars annually. The total national production capacity was 1,131,000 MT before the earthquake. Please see theTable 17.
Table 17. Factory location and production capacity of Reinforcement Steel Bar industries in Nepal
- Before the Gorkha Earthquake, 4 CGI Sheet industries produced around 234,000 MT of CGI Sheets every year. Please see the Table 18 for individual capacity of each of the CGI Sheet industries countrywide.
Table 18. Factory location and production capacity of CGI Sheet industries in Nepal
- Altogether 5 GI Wire industries produced around 78,300 MT of GI Wire every year. Please see the Table 19 for the individual capacity of each of the GI Wire industries countrywide.
Table 19. Factory location and production capacity of GI Wire industries in Nepal
CHAPTER IV: SUMMARY
To satisfy the five major objectives of the study, the conclusions have been derived as below:
- After the Gorkha Earthquake, Brick industries recorded 2 fatalities and 6 injuries. Cement, Steel bar, CGI Sheet and GI Wire industries did not report any major casualty except for some minor injuries to the employees.
- Brick industries of Nepal suffered maximum damage loss of around NPR 1.13 billion. It is estimated that Cement and CGI Sheet industries each suffered damage loss of over NPR 100 million. Only minor damages were recorded in Steel and GI Wire factories all over the country. The damages were mostly done to the sheds and boundary walls of the plants.
- In the first 3 months all the industries reported revenue loss ranging from 60% to 85%. Only CGI Sheet industries experienced around 90% revenue hike.
- In the months following the earthquake, brick industries and cement industries reported loss of employment by around 95% and 25% respectively. Steel bar, CGI Sheet and GI Wire industries reported minimum or no loss of employment due to the earthquake.
- Assessing the first three months’ trend after the earthquake, annual production capacity of Brick and Cement industries have drastically gone down by around 95% and 75% respectively. Annual production of Steel bar and GI Wire industries has decreased by around 33% and 9% respectively. Only CGI Sheet industries have reported around 80% increase in their annual production.
- After the earthquake, Cement and CGI Sheet industries have claimed an increase in unit market price by around 15% and 3% respectively. Both Steel bar and GI Wire industries have reported decrease in unit market price by around 10% and 11% respectively. Depending on varying quality of bricks, the current brick prices are fluctuating in the market although FNBI claims that brick prices are stable before and after the earthquake.
- Nearly 8 months after the Gorkha Earthquake, most of the Brick industries of Nepal are still in their recovery phase. The average business recovery time for Steel bar industries was over one month while Cement, CGI Sheet and GI Wire industries took around two weeks to resume their businesses.
- The national annual demand for bricks before the earthquake was 3.57 billion while the annual projected demand has increased to 4.77 billion bricks after the earthquake. The projected annual production of mere 170 million bricks is based on the first three months’ production trend after the earthquake and the current reduced production is mainly due to damaged facilities, fuel crisis, labor shortages. It is also worth mentioning here that 1.2 billion extra reconstruction demand for bricks, as projected by PDNA, would spread out in next couple of years and may not overburden the industries’ annual targets in the future. Also, PDNA estimates that around 25% of the brick demand can be compensated by the recycling of the salvage. Meanwhile, FNBI also claims that with an expected 25% increase in existing total capacity, around 5 billion bricks could be produced within next year if economic and climate conditions are favorable.
- The national annual demand for cement before the earthquake was around 5 million MT while the annual projected demand has increased to 7 million MT after the earthquake. Since the projected annual production of around 1 million MT is based on the first three months’ production trend after the earthquake and the current reduced production is mainly due to fuel crisis, power shortage and supply-chain disruptions, the cement industries are assured that the future reconstruction demand can be met as the situations starts improving in the country. It is worth mentioning here that around 2 million extra reconstruction demand for cement, as projected by PDNA, would spread out in next couple of years and may not overburden the industries’ annual targets in the future. On the other hand, CMAN estimates that due to reconstruction activities there will be only 25% hike in total demand which can be sustained by Nepalese cement factories as most of them were operating almost 50% below their installed capacity even before the earthquake.
- The total annual projected demand for reinforcement steel bar is over 1 million MT which comprises the annual demand of 875,000 MT and reconstruction demand of around 140,000 MT. Since the projected annual production of 757,770 MT is based on the first three months’ production after the earthquake and the current reduced production is mainly due to fuel crisis, power shortage and supply-chain disruption, the reinforcement steel bar industries assure that the future reconstruction demand can be met successfully if the situations are favorable.
- The total annual projected demand for CGI Sheets after the earthquake is around 240,000 MT which comprises the regular annual demand of 150,000 MT and reconstruction demand of around 90,000 MT. The projected annual production of 421,200 MT after the earthquake is well above the required demand.
- The total annual projected demand for GI Wire after the earthquake is 35,000 MT which comprises the national annual demand of 25,000 MT and reconstruction demand of around 10,000 MT. The projected annual production of 71,253 MT after the earthquake is well above the future demand of the country.
- The production capacity survey of various construction material industries namely, Brick, Cement, Reinforcement steel bar, CGI Sheet and GI Wire industries revealed that the aggregate production capacities were 3.4 billion bricks, 4 million MT cement, 1,131,000 MT Reinforcement steel bar, 234,000 MT CGI Sheets and 78,300 MT GI Wire respectively.
- International Labor Organization (ILO) estimates that there are one million workers already involved in the housing sector. PDNA estimates that an extra 700,000 construction workers will be required for reconstruction alone.
Various recommendations were made based on the study and the results of the study.
- To gather information related to the Gorkha Earthquake impact, various participants from altogether 15 private sector construction industries/associations including, brick, cement, steel bar, CGI Sheet and GI Wire industries were included in the open-ended questionnaire sessions. Including more participants would maximize the authenticity of the entire study.
- The scope and applicability of the study could be widened further by including other housing material industries such as, Timber, Bamboo, Quarry stone, River Sand, Aggregates, etc.
- Since the earthquake was shortly followed by political upheaval and border closure in the country, entire private sector industries were heavily impacted by the added crisis posed by strikes, fuel shortage, load shedding, supply chain disruption, etc. Majority of the construction sector fraternity claim that the economic blockade has been so severe that it diluted the impact of the Gorkha Earthquake. An inclusive impact study of the earthquake and blockade together could produce more comprehensive impact study on earthquake reconstruction projects.
- A total of 37 construction sector industries houses including, brick, cement, steel bar, CGI Sheet and GI Wire industries were included in the telephone survey to estimate the nationwide production of construction materials before the earthquake. To be more specific, the survey could have further explored the rated as well as usual production capacities of individual factories as most of the industries were operating under their rated capacity even before the earthquake.
- Future study could also be directed towards the estimation of demand as well as supply of construction related workers in the country over the next 3 years when reconstruction will be in its prime.
- Brick kilns embracing environment friendly technologies, My Republica Daily Newspaper, 05 Jul 2015, http://myrepublica.com/society/story/24075/brick-kilns-embracing-environment-friendly-technologies.html
- Experts’ View, Business Age Magazine, July 2015, http://www.newbusinessage.com/MagazineArticles/view/1251
- NEPAL EARTHQUAKE 2015: Post Disaster Needs Assessment (PDNA), Vol. B: Sector Reports, Government of Nepal, National Planning Commission, Kathmandu 2015
- Nepal Labor Market Update, ILO Country Office for Nepal, November 2014
- Price of construction material could witness significant hike next fiscal, The Himalayan Times Daily Newspaper, 20 June 2015, http://thehimalayantimes.com/business/price-of-construction-material-could-witness-significant-hike-next-fiscal/