Nepali industries witness significant reduction in their production capacity: CNI study

Published On: July 19, 2022 02:37 PM NPT By: Republica | @RepublicaNepal

KATHMANDU, July 19: The production capacity of Nepali industries reduced significantly in the past one year, a study has revealed.

According to a study conducted by the Confederation of Nepalese Industries (CNI), the industries utilized only 66.81 percent of their total production capacity during the quarter. In the second quarter of the fiscal year, the figure was 71 percent.

CNI published the fourth edition of the Industrial Status Report after studying the activities of various industrial enterprises in the country. Minister for Industry, Commerce and Supplies Dilendra Prasad Badu released the report amidst a special function on Monday.

The report contains detailed statistics on the state of the manufacturing industry and the service industry during the third quarter of the previous fiscal year.

According to the report, during the study period (January, February and March), the manufacturing industry paid an average of 10.96 percent interest (the same for the corresponding period last year was 9.4 percent) while the service sector industry paid an average of 10.92 percent interest.

The study further showed that the manufacturing industries borrowed 31 percent of their working capital from banks and financial institutions. In the previous quarter, 34.4 percent of their working capital was borrowed. Among the participants in the study, 84.5 percent of industrialists said that they were ready for new investment.

The report showed that the income of industries grew by 12.82 percent in the third quarter compared to the second quarter of the previous fiscal year. In the second quarter, the industry’s income growth rate was 27.1 percent.

The report also revealed that during this period, the industries utilized only 66.81 percent of their total production capacity.

While publicizing the report, Minister Badu mentioned that such kinds of regular industrial reports will help in portraying the industrial environment in Nepal. He said that it is necessary to elucidate the consequences of the oil consumed by the generators and investigate the cost of replacing the coal-fired boilers that are currently used in the industries with electricity.

Vishnu Kumar Agarwal, President of the CNI, said that there has been a significant drop in demand in the market which has reduced the income of the industries. He urged the government to be sensitive toward addressing the issues of industries.

Agarwal also said that the CNI is the first in the private sector to have conducted such a survey and published an industrial report.

Birendra Raj Pandey, Vice President of the CNI, said that such reports will help the credibility of the private sector. He also said that they would be published every quarter of the fiscal year.

The research cell under the CNI prepared the report based on a survey of industries. The CNI said it believes that such reports would help formulate fact-based policies in the country.