ITC safeguards Nepal operations with new plant

KATHMANDU - As Nepal’s southern plains, where the factories of most major Indian joint ventures are located, continue to be racked by violence and strikes, Indian tobacco major ITC Ltd is seeking to safeguard the operations of its subsidiary by building a second manufacturing plant in the hilly west.

Surya Nepal Pvt Ltd — in which ITC holds 69 percent stake, British American Tobacco (Investment) Ltd 2 percent and the rest belong to 20 Nepali individuals and corporates — is making an initial investment of NRS 24 crore to start a new manufacturing plant in Tanahun district, reports said.

Surya Nepal, Nepal’s largest private-sector enterprise with a turnover of over $100 million, started operations in 1986 with a single tobacco manufacturing factory in Simara town in Bara district on the India-Nepal border.

The tobacco factory produces five brands of cigarettes and accounts for nearly 0.6 million kg out of the almost 0.7 million kg of cigarette tobacco grown annually in Nepal.

In 2004, Surya Nepal diversified into garments manufacturing with a state-of-the-art factory in Biratnagar in eastern Nepal that produces the John Player brand of clothing for men.

During the 10-year Maoist insurgency, the Simara factory, along with other industries in southern Nepal, saw disruption and violence, including the kidnapping of staff.

Though the insurrection ended in 2006, other armed groups have been mushrooming in the Terai plains with extortion, abduction and violence growing.

In Tanahun, where the surroundings are more tranquil, the new factory is expected to be operational within 16 months.

In the last fiscal, Surya Nepal paid the government NRS 593 crore as revenue.