July 6:  Kiran Shoes Manufacturers, which produces Nepal’s popular   shoe brand Goldstar, is planning to open a new factory in Bhairahawa, Rupandehi.The company is planning to operate a factory in Bhairahawa with an investment of Rs 600 million. The company expects to increase the share of footwear exports to India, which has dropped to 30 percent from 70 percent.The company will operate the factory on 7 bighas of land.

The company informed that shoe production will start from the new factory in Bhairahawa within three months. It has been 30 years since the company started exporting Goldstar to India in the 40-year history of the company.

Vidushi Rana, executive director (branding and marketing) of the company, said that the company is planning to open a new factory in the border town of Bhairahawa targeting the Indian market after a significant decline in exports to India recently.

"We will be operating a big factory in Bhairahawa," Rana said. Some of the machines in Kathmandu are being prepared to be shifted to Bhairahawa,” said Rana.

She said that due to the lack of liquidity in the banking system, they are in a wait and watch situation for expanding investment. According to Rana, only one building has been constructed in Bhairahawa at present. It is ready to start production.

The company is producing shoes and slippers only from Kathmandu. The number of factories has dropped from 11 to 4 now. Earlier, it was the only shoe industry in Nepal, so factories had to be opened in different places. At that time, there were many factories as they used to make the upper part of shoes, thread and sole. The main factory of Kiran Shoes is in Maharajgunj, Kathmandu.

There are four factories in operation in Kathmandu including the ones in Nilupul, Balaju Industrial Area and Maharajgunj. Rana informed that even though the daily production capacity of these factories is 100,000, it is still running at 25 percent capacity. The factory has 18 large machines imported from Italy. Some machines of the shoe and slipper industry from Italian technology will be taken to Bhairahawa. Rana said that they are going to operate a factory in Bhairahawa as the export to India is easy due to the proximity of the city.

The company directly employs more than 3,000 people. About 70 percent of the factory workers are women. Rana informed that the industry provides employment after giving free training for three months. "After the earthquake in April 2015, the industry had to be shut down for six months because the workers went to their villages," Rana said. It was difficult to export shoes, and the export began to decline.

India is a very competitive market for Goldstar shoes, says Rana. According to Rana,  after the brand became popular in India, counterfeit Goldstar shoes started appearing in every house in India. He said that the shoes exported from Nepal could not compete as the fake shoes were available at cheap prices. According to Rana, the company is fighting a case in an Indian court against a shoe manufacturer who uses its brand illegally.

She suggested that the interest rate on bank loans and electricity tariff should also be reduced by identifying export-oriented industries. "We pay an electricity tariff of Rs 80 million annually," Rana said.

The company has also opened franchise stores in other countries such as Qatar, Australia, Bahrain and Japan. Rana said that they are looking for places to open franchise stores in other countries as well. The company also launched the Goldstar brand in the US a few months ago. However, she said that the export and competition has become very challenging due to the high customs duty. The United States has set a 37.5 percent tariff on footwear.