Price of bricks hiked by 15 per cent and could still soar higher
Sujata Awale
Kathmandu
The price of bricks has increased by 15 per cent since the beginning of March, as production could not meet soaring demand. As green clay worth Rs one billion was destroyed due to the heavy rainfall in mid-February, the supply of bricks was hit. production of bricks dipped by as much as 4
According to the Federation of Nepal Brick Industries (FNBI), the production of bricks is limited to 25 per cent of the target. With lower production and high demand, the market will soon face a shortage of bricks. The price of bricks have already been hiked up by 15 per cent — Rs two per piece — as compared to the price set before mid-February. Bricks were priced around Rs 10,000 to Rs 12,000 per thousand units early this fiscal. However, now it costs Rs 14,000 to Rs 15,000 per thousand units.
President of FNBI, Mahendra Bahadur Chitrakar, said, "With the positive vibe seen in construction and real estate, the demand for bricks has increased since the last two years. However, we are not able to meet this soaring demand due to unfavourable conditions." Citing that rain was the main hurdle for production, he said, "We have to work under the sky and if it rains, already made green clay gets destroyed which means 50 per cent loss."
Due to huge losses, a few brick kilns in the valley have already come to closure. Reportedly, 110 brick kilns were operational in the valley last year, however, of late only 100 factories are operating. There are altogether 800 brick kilns across the country. "The shortage of bricks has already hit the Western and Far-Western region of the country hard," he informed, adding that industrialists there could only produce 10 per cent of their target. He said that if the shortage of bricks continued, the only alternative would be importing from India.
The production for bricks is a seasonal business in the country that starts from December to June. Due to the rain, the production of bricks have decreased in the prime season. "There is no doubt that we had a hard time due to rain. And this will certainly hamper our total production this season," said Jacky Maharjan, Proprietor of Bhairab Itta Bhatta. Citing that they produced six million units last season, he said, "This year we can only produce four million units if there is no heavy rain." He also stated that as the production is low, price has been hiked. According to him, they have limited stocks and produce as per the placement of order.
Brick production is a manual job that depends upon climate and workforce. "The trend of migration for better opportunities has created a severe labour crunch in the business," said Bikash Maharjan, Proprietor of Shree Loknath Itta Udhyog. He said that there is a competition among producers to retain staffs. According to him, they used to have 900 staffs previously, but of late the number is limited to 600. "We witnessed 30 per cent increased demand as compared to last year but as there is an acute shortage of manpower, we could only produce one third of our target." The company has a production target of 30 million units this season but, it will hardly manage 10 million.
Maharjan stated that if it rains in days to come, there will be a shortage of bricks. According to him, they have only 1.5 million units in stock, which will be only enough for a few weeks. He further said that the price hike of coal is another factor that led to increase in the price of bricks. He said, "The coal mine at Assam has closed, and we have to import from another part of India paying 50 per cent more." According to him, they used to pay Rs 17,000 per tonne of coal from Assam while they pay Rs 25,000 per tonne these days.
0 per cent due to the rainfall. Untimely rainfall, labour crisis and lack of raw materials are major hassles to the brick industry. Although, the demand for bricks has increased by 15 per cent as compared to the last year, producers could not cash in on the potential.
Published on THT Property Plus/ March 28, 2015
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