Print Edition - 2012-01-18 | MONEY
Biratnagar, so special to Nepal’s industrial history
Jan 17, 2012-
Biratnagar occupies a special place in Nepal’s industrial history. This was the city from where the country’s industrialisation formally began in 1937 with the establishment of the Biratnagar Jute Mill. Since then, the city has developed into the country’s prominent industrial and business hub with several major industrial units operating here.
The establishment of the jute mill immensely benefited the country, with the demand for jute products surging in the international market after the World War-II. This helped create huge employment opportunities in Biratnagar and not only jute, but other goods including rice, textiles and agriculture products were exported to India and third countries. The Nepal-India Trade Treaty signed in 1996 gave the much-needed impetus to industries here.
To say that Biratnagar is the city that began the industrial revolution in the country will not be an understatement. Taking cue from Biratnagar, industries were opened in other parts of the country, including Kathmandu, Birgunj, Simara and Nepalgunj.
Once a leading industrial hub, Biratnagar is slowly losing its charm to Birgunj and other cities. With chronic strikes and shutdowns fuelled by political instability, power shortage and worsening security situation, Biratnagar is struggling to keep its glorious past. Despite having some of the largest industrial undertakings in the country, the city today is a mere shadow of its former self.
The impact of the worsening industrial environment is clearly visible here. Presently, there are only 11 plastic factories, down from the earlier over 100. Likewise, five iron and steel factories, 10 textile factories, 13 readymade garment factories and four utensil factories shut shop since the insurgency began. The biggest blow came last year when the multinational, Surya Nepal, decided to shut down its garment unit.
With the revision of the Trade Treaty in 2001 and imposition of quantitative restrictions on zinc oxide, copper wire, acrylic yarn and vegetable ghee by India, many industries in the Sunsari-Morang Industrial Corridor that were set up to take advantage of duty differences between Nepal and India shut down.
The rise and fall of vegetable ghee industries is one classic example. These industries were set up just to reap benefits from higher customs duty on raw materials in India, but once India lowered the duty, many of them closed down.
In recent years, power shortage has hit industrial production hard. “Sometimes, we feel that we committed a sin by opening industries,” lamented Dinesh Golchha, president of Morang Chambers of Commerce.
Entrepreneurs have insisted on bringing electricity from India immediately, exploring alterative energy sources, business-friendly Acts and rules, better law and order situation and labour flexibility. They have also demanded prohibition on strikes in industries, provision for compensation, expansion of infrastructure such as water, road and electricity in industrial zones and establishment of special economic zones and dry ports.
“Lack of skilled human resources, impact of the Indian policy, unfriendly financial institutions and smuggling are other obstacles,” said Avinash Bohara, president of Morang Merchant Association.
However, all is not lost. The new generation of entrepreneurs from Biratnagar say they are committed to maintaining the city’s past glory. One of them is Suyas Pyakurel, managing director of MM Plastics. “Biratnagar is poised to take a giant leap in the second wave of business opportunities that cross border business and regional trade agreement has provided,” he said. “The Eastern corridor (especially Biratnagar) will be the most lucrative place for investment provided every stakeholder makes an effort to minimise the risks and utilise the strengths.”
The good news is fresh investments are coming to the Sunsari-Morang Industrial Corridor. While new industries have come up here, the old ones have made additional investments in their existing units.
Leading business houses such as Golchha Organisation and Kawara, Rathi, Sharada and Agrawal groups have added investment worth millions of rupees each in areas such as refined oil, mustard oil production, rice mills, plastic factories, iron and steel and noodles.
The Bohara Group has established a new industry with an investment of Rs 180 million. “The environment has improved for investment,” Bohora admitted. “The corridor saw investments worth over Rs 2 billion in the last 15 months,” he added. “I believe the figure will double this fiscal year if the power crisis is solved,” he added.
The Kawara Group has added a new machine at the old biscuit factory in Duhabi, according to director Nawalkishor Kawara. “There has been a sharp decline in bandas, strikes and trade union related problems since last year and that has encouraged the new investment here,” said Rajendra Raut, the vice-president of Eastern Region Chambers of Commerce and Industry.
Golchha Organisation has made an additional investment of Rs 400 million for the production of iron and steel, angles, channels and section. The group produces Hulas wires.
Rijal Group that has been producing poly tanks has also invested in a new gas plant. The group introduced ‘Rijal Gas’ by investing Rs 150 million. “We added a new industrial unit as industrial environment is improving,” said Nabin Rijal, the director of the group.
Bagmati Oil Industries has added a new plant to produce refined oil with investment of Rs 130 million, according to Devakinandan Agrawal, the director of the plant, who is also the vice-president of Morang Merchant Association.
Two other entrepreneurs, Ganesh Agrawal and Sudhir Agrawal, have established a rice mill with investment of Rs 200 million. Similarly, the Rathi Group is preparing to set up a new plywood factory. The group is investing Rs 120 million for the plant.
Jagadish Prasad Rathi, the chairman of the Revenue Advisory Committee at the Federation of Nepalese Chambers of Commerce and Industry, said there is a need for collective efforts to boost investment in Biratnagar.
Published: 18-01-2012 09:24