Poor industrial environment leads to investment withdrawal
eKantipur.com 11-Oct-07

The deteriorating industrial environment in the recent days has prompted withdrawal of investment from the Birgunj industrial corridor.

Protracted labor problems, a weakening law and order situation as well as frequent strikes in the tarai region are some of the factor that are leading to closure of more than half a dozen industries here while most the remaining industries are embroiled in labor disputes.

Jason's Chemical, has already packed up from Birgunj where as Ganga Chemical Industries (GCI), opened some three years back with an investment of over Rs 1 billion and has an annual turnover of around Rs 4 billion, is also following suit, local business men said. Both were opened in collaboration with Indian companies.

According to Bijaya Sarawagi, the immediate past president of Birgunj Chamber of Commerce and Industry, GCI is all set to shift to Sri Lanka where as Pashupatinath Industry and Concept Pharmaceuticals are also preparing to shift from Nepal.

"More than 52 industries along the industrial corridor are in the brink of closure," Sarawagi said.

Eastern Textile, Triveni Textile, Pashupatinath Industry, Concepts Pharmaceuticals and Necon Plastics are among those which have already stopped production.

They were closed due to protracted labor disputes that emerged from different kinds of demands by trade unions.

"Disputes between the Maoist and UML affiliated trade unions led to the closure of most of the industries," Sarawagi further added.

However, Amrit Joshi, chairman of Nepal Trade Union Congress - Parsa, claimed that the dispute had deepened due to lack of implementation of provision of appointment letters and categorization of designation of workers as stated in the labor act.