"We have started purchasing raw materials and it will take a minimum of one-and-a-half months for the company to resume production," said Shital Kaji Shrestha, general manager of the company, which is the only manufacturer of tyres and tubes in the country. The factory is facing shortage of natural rubber along with about five dozen other raw materials.[break]
The raw materials required by the company are imported from India, China and Malaysia. The company had issued a tender before Dashain for the supply of raw materials but no supplier evinced interest. "A time of 30 days was provided to respond to the tender, which was extended by the company twice for seven days on each occasion, yet no one responded to the tender. Finally, the company decided to buy raw materials as per the special provision in the Act," said Shrestha to Republica. The company had published the tender notice in national dailies which failed to catch the attention of international companies.
The government last year made it mandatory for all state-owned enterprises to follow Public Procurement Act while purchasing raw materials. A lengthy and cumbersome process that the Act makes the procurement formalities resulted in raw material stocks hitting rock bottom before new supplies could start coming. "We knew that we´re headed for a severe shortage of raw materials but we had to follow the procurement rules. Since, we could not ensure timely supply of raw materials, we had to close production for some time," said Shrestha. Till last fiscal year, the company was importing raw materials on its own discretion.
According to the Act, state-run industries need to issue tenders in national newspapers to purchase raw materials. "Finally, we had to follow ´special circumstances´ provisions of the Act," Shrestha added. There are no dealers in Nepal who can supply necessary raw materials to Gorakhali Rubber Udyog Ltd and international companies do not get the information published in national newspapers. "We can´t purchase heavy amount of raw materials for lack of capital," said Shrestha.
The company currently has 370 workers and with the company closing production at least 300 workers have lost their jobs. "From time to time, we put pressure on the company to purchase raw materials in time but the company delayed the process, which has resulted in closing down the production," said Ishwor Pariyar, chairman of Nepal Industrial Workers´ Association, Gorakhkali unit.
Gorakhkali Rubber Udyog Ltd has a production capacity of 88,000 units of tyres a year but due to lack of raw materials, it has been producing about 32,000 units of tyres per year.
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