KATHMANDU: Nepal’s key manufacturing industries ran at an average of 48.2 percent of their capacity in the fiscal year 2015-16 as the Himalayan nation suffered prolonged border blockade in the year, Nepal’s central bank said. Nepal Rastra Bank (NRB), the central bank of the country, said the capacity utilization of major industries suffered downturn in the last fiscal year that ended in mid-July against the average capacity utilization of 52.7 percent in the previous fiscal year 2014-15. According to the latest study report released last week, Pashmina, noodles and electric cable manufacturing industries saw the highest capacity utilization while industries producing rice, iron and steel and soft drinks ran at their lowest capacity during the review period. A total of 23 products based industries were studied to see their capacity utilization. The central bank said that the capacity utilization 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 utilization of the industries.”
Nepalese industrialists say that most of the industries were virtually closed during the blockade which resulted in low capacity utilization. “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 Nepalese Chambers of Commerce and Industry (FNCCI), 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 that things have improved this fiscal year because of improvement in power supply and reduced incidents of strikes as well as lifting of blockade.
