Production to be restarted at Nepal’s Janakpur plant

Nepal’s Minister for Industry, Mahesh Basnet, has said that preparations have been made for resuming production at the Janakpur Cigarette Factory, according to a story in My Republica quoting a National News Agency report.

Basnet said the factory would resume operations soon ‘with the consent of the people’, which was possibly in part at least a references to the former factory workers who were in a long-running dispute over compensation.

The factory, which was established in 1965 with the support of the Russian government, has been closed for about three years.

It used to manufacture popular brands of cigarettes such as Yak, Gaida and Deurali.

However, with the entry of Surya Tobacco into the market, its near monopoly ended and it started incurring losses. By the end of 2010/11, the company had a cumulative loss of Rs170.80 million. The factory cited the use of obsolete machines as one of the reasons leading to its collapse.

But other factors were said to include unnecessary political intervention in the factory’s operation and the appointment of its chief, and general overstaffing.

Now, according to Basnet, the factory’s management is being privatized. The management would be handed over to the private sector but the lands and buildings would remain the property of the government, he said.