February 18: The process to set up an assemble plant by South Korean company Motrex has not been able to move forward despite its commitment to assemble 6,000 vehicles in Nepal by mid-February last year. The Investment Board Nepal had approved Motrex to invest in Nepal for assembling vehicles on March 15, 2019.
As soon as the investment was approved, the company had committed to set up plant within 10 months and assemble 6,000 vehicles within a year. However, the process to set up the plant has no signs of progress even after 22 months of approval. Last November, a preliminary agreement was signed between the board and company. Motrex was interested in assembling Hyundai and Kia vehicles in Nepal.
After the agreement, the company had made various demands to the Government of Nepal which has not been addressed so far. The company put forward their demand such as monopoly of the company in the automobile assembly industry in Nepal for seven years of signing the agreement, customs exemption on the import of machinery parts but the vehicles should be sold at the same price.
The government had decided to provide 100 ropanis of land to set up the plant in Motipur Industrial Area of Butwal. However, the land to be provided to the company has not been finalized yet.
Motipur Industrial Area is divided into Motipur ‘A’ and Motipur ‘B’. Since Motipur ‘A’ consists of forest, there is confusion regarding how to provide the forest area to the company.
According to information office of the Board, Dharmendra Kumar Mishra, the concerned authorities are working to resolve the forest related issues in Motipur ‘A’. Since it was not possible to physically meet the representative of Motrex and discuss the issue due to coronavirus, virtual discussion was done on last November.
He further informed that preparations are underway to sign a partnership agreement (PI) with the company soon. Similarly, Himesh Kharel, Nepal’s representative for Motrex, said that the company is in contact with the Investment Board.
Motrex is not the first company to assemble vehicle in Nepal. Golchha group had assembled vehicles under the Mustang brand in Nepal, but the plant was closed in 2018 citing policy reasons of the government.
Laxmi Intercontinental, the official distributor of Hyundai and Kia for Nepal, has also applied for registration of an assembly plant after Motrex took the initiative to assemble Hyundai and Kia vehicles.
So far, 22 companies have been registered with the Department of Industry for vehicle assembly.