KATHMANDU: The country’s plastic industry is reeling under the strain of power cuts and labour problems, which is aggravated by lack of government incentives and the over-whelmingly negative image of plastic among the general public. According to concerned stakeholders, although the country is self-dependent on plastic products till date, it might soon have to lean on plastic imports in the future unless its problems are scientifically addressed.
Irregular electricity supply has hit the industry hardest, as the plastic manufacturing machines need to be warmed up through uninterrupted power supply prior to regular functioning. Warming up alone takes two to three hours depending on the nature of products. “With power cuts sometimes stretching over 16 hours a day, operating our factories has become a real challenge,” says Sharad Sharma, vice president of Nepal Plastic Manufacturers’ Association (NPMA).
To combat load shedding, the entrepreneurs are operating their factories through diesel plants, which is obviously expensive. This makes it difficult for them to compete with similar products imported from India, which also enjoy a tax rebate. “The government charges us 13 per cent VAT, 10 per cent custom tax and five per cent excise duty, whereas in India, VAT is around seven per cent, custom tax is four per cent and excise duty is three per cent,” explains Rajeshwor Lal Joshi, secretary general of NPMA. Besides this, the industry also suffers as it is completely dependent on imported raw materials.
Another hurdle in the industry’s success is the labour turmoil. While trained labourers opt for overseas employment, hiring new ones is not easy. “If
new employees happen to be affiliated with trade unions, they create problems and affect production.
Even if our workers do not want to indulge in such activities, politicised union members from other factories force them to join strikes,” informs Sharma.
Besides this, unchecked smuggling of substandard plastic products from porous Indian borders is a serious challenge facing plastic
industries. Manufacturers claim that cheap smuggled plastic products have captured the markets along the border. Smuggled plastic products and unscrupulous entrepreneurs are also posing serious threats to genuine plastic producers. Joshi reveals, “Although members under NPMA abide by the government regulation of not producing polythene bags below 20 microns, such bags are found aplenty in the market.” This is not surprising, as only 107 out of more than 400 plastic factories have been registered under the association. Joshi adds, “Custom officials as well as employees of municipalities and Department of Commerce must strictly implement regulations to do away with illegal plastic products.”
Manufacturers are disheartened at the inability of government officials to clamp down on this illegal business, besides its lack of initiation to facilitate plastic industries. “Not long ago, Nepal used to export around 80 to 90 per cent of woven sacks to India through 20 factories. But currently most of them have already closed down, thanks to the unfavourable environment,” says Ram Prasad Shrestha, chairman of Pioneer Plastic Industries in Swayambhu, which has remained closed for the past few months. With over two decades of experience in plastic manufacturing business, Shrestha says, “The fate of the plastic industry in Nepal is dismal, and I’d to shut down my factory as operating it was too costly. I may reopen it if the scenario improves.” His factory, which employed 60 personnel, used to supply high quality polythene bags to Bhat-Bhateni Supermarket.
Shrestha alleges that the lack of government vision is to be blamed for the deter-iorating state of the industrial sector. “Besides improving infrastructure and incentive, the government should also address the labour issue and impose a law to make factories strike-free zones,” he opines. Government apathy aside, plastic manufacturers are further weighed down by the negative attitude towards plastic products, which has been strengthened due to the environmental protests against it. Countering this, Sharma says, “Plastic is now an essential ingredient of life and not as harmful as
publicised. The problem lies not with plastic as such but with the lack of management. Haphazard disposal of plastic waste can cause problems, but it is recyclable.”
In order to boost this sector, concerned entrepreneurs suggest that the government guarantee uninterrupted power supply to plastic
industries besides providing adequate incentives with liberal dealings in terms of VAT and tax. They also urge the government to allocate more development funds in the budget and a speedy
release of development budget. Entrepreneurs also suggest setting up regular and stringent monitoring mechanisms for plastic factories and their products.
According to them, the government should encourage factories to move to far-flung areas, thereby enabling healthy competition and a
robust business opportunity.