First factory in Bhairahawa SEZ starts production

Published On: May 15, 2019 02:30 AM NPT By: MOHAMMAD HABIB

Shakti Minerals has started production of flux and dolomite

BHAIRAHAWA, May 15: Shakti Minerals, the first factory in Special Economic Zone (SEZ) of Bhairahawa, formally started operation from Tuesday.

Minister for Industry, Commerce and Supplies Matrika Yadav inaugurated the industry that produces flux and dolomite.

Flux is a raw material for steel industry, while dolomite is used by paint factories. The industry is the first of its kind in Nepal as no other industry in the country is producing these raw materials by locally available limestone, government officials say.

The factory established with an investment of Rs 400 million is spread over 18,467 square meters of land.

Though Bhairahawa SEZ was opened in 2017, it took over two years for allotment of land plots and installation of plant.

Shakti Minerals has production capacity of 1,500 tons per day. It directly employs 155 people, while 500 others are indirectly employed.

Inaugurating the factory, Minister Yadav highlighted the importance of export-based factories at a time when the country's trade deficit is widening at an alarming rate. "The government committed toward attracting foreign investors. We have made several policy reforms to ease doing business environment," he said.

Binod Kumar Shrestha, chairman of Shakti Minerals, said that the factory will export at least 60 percent of its production as required by the SEZ law. “Our main market is India. But we will also export to other countries," he added.

Also speaking on the occasion, Industry Secretary Yam Kumari Khatiwada said that factories set up in SEZ are important for employment generation. "Other factories are also starting operation in the near future," she added.

As many as 68 plots in Bhairahawa SEZ have been awarded to 22 different factories. According to SEZ management, four factories are on the last stage of installing their plants.

The government has waived off customs tax and Value Added Tax on produces of factories in SEZ. However, VAT will be levied if the products are sold in the domestic market. Similarly, factories in SEZ enjoy income tax holiday for the first five years, and 50 percent income tax waiver for another 25 years, according to Special Economic Zone Authority -- the entity that manages and regulates factories opened in SEZ. Also, employees cannot form trade unions in these factories.


Meanwhile, the Department of Industry is starting one-stop service for investors from Wednesday.

The unit, which has been opened at Tripureshwar, is expected to ease doing business environment in the country and eliminate the burden of going to over a dozen places offices for registering firms to settle tax issues, among others.

Binod Prakash Singh, director general of the department, said that officers of different government offices will be deputed in the same floor of the Tripureshwar-based office. These officials will provide services ranging from registration to insolvency of firms, he added.

The services include registration of firm, investment permission, tax services, customs clearance services, and visa services for foreign investors and foreign employees, among others. These services were provisioned in the Industrial Enterprises Acts in 2016.

“The executives of the one stop services are responsible for any issues that an investor faces in regard to their firms. They will have to address those issues promptly with the help of their respective departments and offices when needed,” said Singh.

Likewise, the Investment Board Nepal will also have a separate one stop service unit for large scale investments. During the Nepal Investment Summit held earlier in March, the government made commitment to starting one-stop services at both the offices to facilitate investors.

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