Business News December 2014

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First Plastic Expo Concluded
Plast Nepal 2014, the first plastic expo of Nepal concluded in the capital recently. The three-day expo was organised from November 14 at Bhrikuti Mandap Exhibition Hall, Kathmandu.
 
More than 80 international and 50 national exhibitors showcased innovative technologies in machinery and equipment, raw materials, finished and semi-finished products and services related to the plastic industry. The expo demonstrated the growth potential of the plastic sector such as packaging, construction and infrastructure, health automobiles, household, footwear among others while also creating awareness on recycling and reuse of plastics.
 
“We can make profits from recycling the polythene bags that we use on daily basis,” said Dilli Ram Sapkota, president of Nepal Plastic Manufactures Association, Chitawan. “60 different products can be made from the polythene bags that we throw away as waste,” said Murari Prasad Oli, advisor of the association. 
 
The Nepali plastic industry has a total investment around Rs 37 billion and is a source of Rs 7 billion revenue to the government annually. Likewise this industry has generated around 50,000 direct and indirect employments, claimed Sharad Kumar Tibrewal, chairperson of Plast Nepal Foundation Tibrewal during inauguration of the event.
 
GIS Programme Grounded Due to Budget Insufficiency
Central Bureau of Statistics’s (CBS) Geographical Information System (GIS) programme has been grounded due to lack of sufficient funds to keep it running. This two-year programme, brought into operation two years earlier, was grounded after the government provided only 100,000 rupees against CBS’s original estimated budget of Rs 10 million.
 
Existing statistics are limited to administrative distribution only but the GIS was designed to include village/tole/settlements as well in the geographical mapping. “This would help in understanding and seeing position of a particular place in the globe,” said Dr Rudra Suwal, deputy director general of the CBS.
 
Suwal claimed that lack of budget has restricted the Bureau from buying required satellite images. Once the data of a certain place is entered in the system, it will help in providing various information like- population, education and health condition, jungle, fertile land, river, bridge and all necessary information regarding infrastructure development. Suwal said, “All this information can be obtained through Global Positioning System (GPS).”
 
The programme was initiated following demands from the government for such statistics to create managed settlements, he informed, adding that it is necessary for managing human settlements as haphazard settlements are destroying natural resources.
 
South Asia Modernizing its Business Environment: World Bank
A new World Bank Group (WBG) report states that four of eight economies of South Asia, including Nepal have implemented at least one regulatory reform in 2013/14 with the aim to enabling business environment for local entrepreneurs. According to the statement released by the World Bank, three countries—Bangladesh, Nepal, and Pakistan—focused their efforts on adopting modern electronic systems to facilitate business activity.
 
‘Doing Business 2015: Going Beyond Efficiency’ finds that since 2005, all economies in the region have taken steps to improve the business environment in areas measured by the report. India implemented the region’s largest number of regulatory reforms in that period, with 20, followed by Sri Lanka with 16.
 
“Doing business is easier in economies with administrative efficiency and strong regulatory protections,” said Rita Ramalho, lead author of the Doing Business report. “We are encouraged by the modernization of regulatory processes in South Asia because it is benefiting local entrepreneurs. In Nepal, for example, a businesswoman trying to build a new warehouse nine years ago would have spent 143 days on the construction permitting process. Thanks to the adoption of some of the best global practices, such as a new electronic building permit system in 2013/14, this process can now be completed in 86 days.” The report finds that India set the pace for regulatory reform in the region in 2013/14. It made starting a business easier by reducing registration fees and strengthened minority investor protections.
 
Similarly, Bangladesh and Pakistan made trading across borders easier by implementing computerized systems that allow web-based submission of documents, reducing the time to export and import. The report also finds that Singapore tops the global ranking on the ease of doing business. Joining it on the list of the top 10 economies with the most business-friendly regulatory environments are New Zealand, Hong Kong SAR, China, Denmark, the Republic of Korea, Norway, the United States, the United Kingdom, Finland and Australia.
 
Tanzifco Sets its Foot in Nepal
Kuwait based Tanzifco Group has established its subsidiary in Kathmandu. Tanzifco Cleaning and Waste Management Services Pvt Ltd has started a training centre with an initial investment of Rs7 million. The training centre has the capacity to train 150 people per month. The major services of the company include general cleaning, pest control, security services, external façade and internal cleaning at heights (rope access, cradle and scaffolding), waste collection, office boys and girls, housekeeping, porter, landscaping and allied services training.
 
But the company has bigger plans up its sleeves. It intends to establish bigger training centres to provide electrician, plumbing and scaffolding training along with providing waste management services, cleaning services, special services, security services, landscaping and pest control services. Purushottam Gautam, deputy general manager of the company said that the company would be increasing capacity of the training centre capacity along with establishing new centres outside the capital.
 
According to Gautam, Tanzifco’s Cleaning Operators Proficiency Certificate is a course provided by the British Institute of Cleaning Science (BICSc). Tanzifco Training Centre (TTC) is a certified assessor as well as a corporate member of BICSc. The trainings are provided under the guidance of a BICSc qualified Trainer and consists of a four-day course, including orientation, health and safety issues. One session can accommodate 20 trainers.
 
The training is said to benefitthose interested in working abroad as general cleaner, supervisor, senior supervisor, hospital cleaner, messenger, porter, cleaning team leader, office boy as well as can help students who are looking for abroad study in countries like Australia, UK, New Zealand among others to get part time jobs in such areas. 
 
TTC had recently established its subsidiaries in Sri Lanka and India along with Nepal to recruit and train prospective candidates. The company has been operating across the United Arab Emirates, Baharain, Qatar, Oman and Egypt. Tanzifco Emirates LLC, Dubai holds 75 per cent stake and the remaining 25 per cent investment comes from Nepali partners, a statement from the company said. Tanzifco Group was first established in Kuwait in 1963, as a pioneering establishment providing modern cleaning services.
 
Far West Gets its First Biscuit Industry
Sudur Food Industries (SFI), the first biscuit manufacturing industry in Far Western Development Region, has been established in the Kailali district. Local food producer Om Prakash Agrawal and his son Kavish Agrawal established the industry with a 150 million rupees joint investment.
 
Om Prakash Agrawal, director of the industry informed that the industry is equipped with latest biscuit production modern technology. As part of its launch, SFI has introduced nine biscuits in the market – Glubicks, Kibicks, Cocon, Butter Ruce, Barbi, Milk Cream, Orange Cream, Pineapple cream and Vanilla cream with plans to introduce over a dozen more in the near future. 
 
SFI has a capacity to manufacture eight tons of biscuits in eight hours. However, depending on the market demand, presently, it has been manufacturing only 2.5 thousand cartons of biscuits in a day. Agrawal claimed SFI is the topmost industry in Nepal on the basis of its production capacity and its use of technology. He further added that SFI would contribute in reducing Nepali people’s dependence on Indian biscuits for quality biscuit products. 
 
SFI had started trial production two months ago and with along with starting production on a commercial scale, it is presently busy in strengthening its distribution network. Its biscuits are available in 50 to 60 grams weight category in the market. Agrawal claims that the products have received good demand from the consumers but complained that the industry has not been able to fulfil the increasing demands due to lack of skilled manpower and increasing loadshedding hours. SFI is presently employing over 100 people and this number is expected to increase by three fold if the industry starts to produce at its installed capacity. Elaborating on the future plans, Kavish Agrawal said that the industry also has plans to manufacture noodles in the days ahead.
 
NEF Ties Up with ORF 
The Observer Research Foundation (ORF) and Nepal Economic Forum (NEF) have signed a co-operation memorandum of understanding (MoU). Samir Saran, vice president of ORF and Sujeev Shakya, chairman of NEF signed the MoU in New Delhi, India, in the presence of former diplomats, representatives from diplomatic missions, academia and media of both countries. 
 
The occasion was marked with a talk program on “The Modi Effect - Redefining Nepal India Relationship,” hosted by ORF.  Speaking on the occasion, C. Raja Mohan, distinguished fellow at ORF, said the emergence of a strong government and decisive leadership in Delhi has produced a moment that is propitious for the transformation of India-Nepal relations. 
 
SujeevShakyatermed the tie up as a historical moment and that heralded a new era in building networks across institutions in Nepal and India. With very few institutions working on the economic opportunities provided by redefining the India Nepal relationship, he expressed NEF’s excitement in working with India’s leading think tank.
 
Rasuwagadhi Border Point to Open 
The government has decided to open the Rasuwagadhi border point for two-way international trade with China. The decision comes as part of the agreement reached with the China in 2012. Ministry of Commerce and Supplies (MoCS) claimed that preparations from both of the countries have almost been completed and informed that the border will be opened within few weeks. China has already completed building physical infrastructure and Nepal also has already made necessary preparations regarding immigration, quarantine, and customs, an official with the ministry confirmed.
 
So far trading in Rasuwagadhi border was confined to border trades only. With this development, international standard two-way trading will be possible. The border point will come into operation as soon as the immigration office is set up there. Proceedings for it are already on the move. 
 
Despite government’s claim, the Chinese side has claimed that the necessary infrastructures, as agreed to in the agreement, have been not in the place. Chinese officials have barred 80 containers citing similar reasons. Those containers were rerouted to Rasuwagadhi from Tatopani border by traders. Traders claimed that the problem came to the fore after Nepali customs office wanted to check them in Tatopani itself rather than in Rasuwagadhi.
 
Though huge informal trade takes place through the Rasuwagadhi border point, it is not mentioned in the country’s formal trade statistics because of the closure of the transit point. Trade analyst suggest that the transactions through banking channels should be made mandatory complying with the Economic Act as soon the border point opens along with stressing on developing necessary infrastructure. 
 
Nepal China trade is increasing rapidly these days. Analysts say that the growing informal trade negatively affects trade data, tax collection and it will affect in drafting policies in the long run. “Policy weakness as well as industrialist and traders are equally responsible for the increase in illegal trade,” said Mimansa Adhikari, Tatopani Customs Chief. He said, “The umbrella organisations of the industrialists and traders should be able to stop the misuse of the certificate of origin.”
 
Meanwhile, construction of the dry port has started in Timure, Rasuwa after government made the land of Langtang National Park available for it. As soon as the construction of the port completes, the space for custom check post, security quarantine, storage and container parking will be available at the border point.
 
GAN Urges for Subsidized Loan and Cash Incentives
Readymade garment industrialists have urged the government for availing easy processing of subsidized loan and cash incentive to promote readymade garments. To increase the competitive advantage of the industry, government should provide different facilities and increase cash encouragement in exports, said Ashok Agrawal, general secretary of Garments Association of Nepal (GAN). “We see huge potential in the export of readymade garments. This requires support from the government as well,” he said to back GAN’s demand.
 
GAN has introduced a nine point working procedure for the production and export promotion of readymade garments. Along with the demands for subsidized loan, and raising cash incentive for export, GAN has requested removal of pre bank guarantee while importing raw materials to boost the production and export of readymade garments. While claiming that the government must focus on the export of readymade garments to overcome the huge loss faced by the industry, GAN has demanded the inclusion of readymade garments under Nepal Trade Integration Strategy (NTIS). During the FY 2070/71, the export of readymade garments increased by 46.6 percent and brought in 5.6 billion rupees in the country.
 
Melamchi to be Delayed
Urban Development Minister Narayan Khadka informed that Melamchi drinking water projectwill be not completed in its scheduled time. The Minister said so while briefing the legislature committee on development recently and informed it that the project might complete by October 2016 if the tunnel is dug at the rate of 30 to 32 metres a day against the present 20 to 22 meters. 
 
However the parliamentary committee refused to accept the excuse forwarded by Minister Khadka and asked him to complete the project within the agreed time frame. “We have asked the Minister to make necessary preparations to finish the project within the scheduled time,” Rabindra Adhikari, chairman of the committee said. The much-hyped Melamchi drinking water project includes a 27.58 kilometres tunnel. Out of this, 17.5 Km tunnel is yet to be dug.
 
Even if Melamchi water comes to Kathmandu, it won’t be sufficient to fulfil the water needs of its citizen. The demand for water in Kathmandu valley is 360 million litres only out of whichMelamchi will supply170 million litres everyday. Considering this fact, the committee has directed the ministry to come up with other such projects.

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