Penden Cement Authority Limited (PCAL) in Gomtu has sent its team to Gujarat, India to explore the second hand gearbox that it has decided to procure.

The cement manufacturing company has been facing severe shortage in production since the gearbox of one of the clinker producing coal mills’ (c-line) gearbox broke down.

Clinker is the main raw material used to make cement. With both coal mills running, Penden can produce more than 1,200 metric tonnes (MT) of clinker a day.

With clinker production completely shut for some days in June this year, PCAL dispatch had dropped by more than 55 percent compared to the dispatch in 2016 the same month.  It dispatched 12,135MT of cement June this year. For the same month in 2016, Penden had dispatched 30,243MT of cement.

Meanwhile, the procurement decision comes after the recent tender announcement it made for the second time.

PCAL’s general manager (plant), Sherab Tenzin, said they have sent two mechanical engineers for the second hand gearbox.

“They will inspect the gearbox,” he said, adding that the inspection would determine whether the used gearbox is as per the PCAL’s requirement.

It will take PCAL about 10 to 12 days to ship the gearbox if it is found suitable. The current price of the machine is Nu 1.65 million (M). However, it is not yet clear the potential change in the price the recently implemented Goods and Services Tax (GST) regime would bring.

Penden has been facing the gearbox problem since mid April. The 20-year-old gearbox had undergone some in-house repairs. Production has been affected since then.

From January to June last year- PCAL dispatched about 205,826MT of cement. This year for the same period, the company dispatched about 179,524MT.

PCAL saw a negative difference of 26,302MT of cement worth Nu 147.75M considering the cement price.

A metric tonne of cement costs Nu 5617.50.

Despite problem in clinker production, Penden is still producing cement. It is using the functioning coal mill one, which is also called as the k-line to produce clinker. Although it is economically unviable to just use one mill, it still produces about 250MT of clinker, which is used to make cement.

PCAL is still distributing cement in the domestic market. Export has stopped completely since June 18.

Meanwhile, cement export this year is expected to fall for PCAL and other cement manufacturers in the country due to the GST implemented early this month. A 28 percent import tax is applicable in India, which means cement stockists will have to bear more, which would inflate their buying price.

Export is PCAL’s main business with it exporting more than 60 percent from the total cement produced annually.

However, demand this year in the domestic market has drastically shot up, even facing shortages sometime this year.

Rajesh Rai | Gomtu