Despite The COVID-Induced Effect and Fierce Market Rivalry, Riddhi Siddhi Cement Collected Revenue Worth NPR 6,370 Million in FY21

Established in 2013, Riddhi Siddhi Cement Private Limited (RSCPL) is a joint venture of Shanker Group and Ambe Group.

The registered corporate office of RSCPL is located in Thapathali's Central Business Park in Kathmandu, while the manufacturing site is located in Ratomate, Hetauda in the Makwanpur district.

Despite the COVID-induced effect and fierce market rivalry, RSCPL was able to create a sizable revenue base of NPR 6,370 Million in FY21.

RSCPL today sells more than 50% of its clinker to other nearby grinding mills. In the 9 months – of FY21/22, compared to FY20/21, RSCPL's sales concentration grew, with the top 10 customers accounting for 28% of the company's total cement sales. Similar to that, there is a higher than average concentration of buyers for clinker sales, who are primarily independent grinding operations that heavily depend on group companies.

According to reports, RSCPL is anticipated to gain advantages as the company has  joint venture with the Shanker group and the Ambe Group, particularly in the area of supply/distribution channels. RSCPL may be able to continue strong performance with the support of its group firms' long operational histories in a variety of industries, including manufacturing, trading, insurance, and hydropower, as well as the promoters' varied backgrounds. Additionally, RSCPL benefits from the promoter group's financial adaptability. The fact that these organizations have been in operation for more than 40 years adds to the comfort in terms of market presence and understanding.

Since the cement sector is quite cyclical and heavily dependent on the nation's economic expansion. As a result, the company is subject to industry-wide cyclical trends in supply and demand, which have an effect on capacity utilization, revenues, and profits. Additionally, the majority of expenditures for building and development are made during a certain season, which affects Nepal's overall need for cement. Additionally, because cement is a volumetric product, the high import duties and high transportation costs favor Nepal's cement sector. Therefore, any modifications to government laws will have a significant effect on the entire cement business. Additionally, a sizable amount of its raw materials are imported, putting the corporation at risk from currency fluctuations.

The long-term bank facilities for the company totaling NPR 8,432.80 million have been given the IRN BBB- (Triple B Minus) rating by Infomerics Credit Rating Nepal Ltd (Infomerics Nepal), while the short-term bank facilities totaling NPR 2,434 million have been given the IRN A3 (A Three) rating.