With a drastic increase in cement production, the Dungsam Cement Corporation Limited (DCCL) in Nganglam has been successful in reducing its loss from Nu 720 M in 2017 to Nu 30 M last year. This is attributed to increased cement production from 200,000 metric tons (MT) in 2014 to 633,000 MT last year. The company targets to achieve zero loss and make maximum profit by this year.
Since its commissioning in 2014, the company has been suffering losses due to its Nu 5.5bn loan. In addition to being in the RED, the company was also not able to increase its production. However, despite its loss, the company has a positive performance for the past couple of years. The revenue has increased to Nu 1.5bn in 2014 to 3.7bn last year.
From minimising its loss to increasing its production, now the things are looking positive. In terms of operation, the company is running in a profit. The company also carried out restructuring and extension of plant and equipment recently.
The company supplies mostly to Hydropower projects especially PHPA 1 and PHPA 2. However, delayed payment has been a problem for the company’s cash flow. At any particular time, there is around Nu 400 M balance with the hydropower projects. The company supplied 291,794 MT to hydropower projects in 2017 and 320,702 MT last year.
Despite its production capacity of 1300,000 MT, the company has not been able to achieve its full capacity. This is mainly due to the small domestic market and cutthroat competition in the Indian market.
“Selling in India is difficult as there are so many brands. Just even in Assam and West Bengal, there are about around 25 brands, We have to compete with them. On top of that, they have GST. Taking into consideration all these factors there is a big challenge in India,” Sonam Jigme, the Chief Executive Officer of DCCL, said.
Marketing and cash flow being the two major challenge the company now feels that the government should also intervene.
“You see now roads are all cement roads in other countries and probably the government should come up with such initiative. Wherever feasible the government should come up and have these roads built by cement. Maybe roads, tiling units, some concrete units I think will have to come up,” Sonam Jigme added.
Inadequate raw materials and frequent strikes in the border are the other challenges. Since cement business is only viable within the radius of 500 kilometres, exporting to Bangladesh and Nepal was not feasible. However, the company is exploring into increasing its export. The company has targeted to supply 400,000 MT to India this year. Presently there are 450 national employees working in the company.
