Nepal’s industrial capacity utilisation down

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Kathmandu, Dec 27 (IANS) Nepal’s key manufacturing industries ran at an average of 48.2 per cent of their capacity in the fiscal year 2015-16 as the Himalayan nation suffered prolonged border blockade, the country’s central bank has said.

Nepal Rastra Bank (NRB) said the capacity utilisation of major industries suffered downturn in the last fiscal year that ended in mid-July against the average capacity utilisation of 52.7 per cent in the previous fiscal year 2014-15, Xinhua news agency reported.

According to a recent report, Pashmina, noodles and electric cable manufacturing industries saw the highest capacity utilisation while industries producing rice, iron and steel and soft drinks ran at their lowest capacity during the review period.

The central bank said the capacity utilisation of the industries suffered in the last fiscal year as they faced shortage of essential fuel and raw materials which resulted from four and half months’ blockade imposed by India amid concerns about political unrest in Nepal’s southern plain over the country’s new constitution.

Most of Nepal’s major industries have been established in southern plain because of proximity with India so that they could easily import raw materials as well as export finished goods.

“Some industries were also affected by deadly earthquake of April 2015,” states the report.

“In the aftermath of earthquake, demand for goods other than essential ones also decreased creating less demands overall in the aftermath of the earthquake affecting the capacity utilisation of the industries.”

Nepali industrialists say that most of the industries were virtually closed during the blockade which resulted in low capacity utilisation.

“The number of working days in Nepal is far less than other countries because of more holidays and occasional strikes by different political groups,” said Pashupati Murarka, president of Federation of Nepali Chambers of Commerce and Industry, the apex private sector body of Nepal.

“Our working days are just 280-285 days in a year against 330 days in many other countries.”

He, however, said things have improved this fiscal year because of improvement in power supply and reduced incidents of strikes as well as lifting of blockade.

–IANS

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