Insecurity forces Surya Nepal to start new plant in hilly west

Surya Nepal Pvt Ltd -- one of the largest tax payers in the country -- is in expansion mode as it is planning a new manufacturing plant in Kharenitar VDC-7 of Tanahun district.

After continued strikes and bandhs in Simara -- the Terai region -- where Surya Nepal's another manufacturing plant has been established some 22 years, the factory decided to start another plant in the hilly west.

The new manufacturing plant -- at Rs 240 million investment -- has a production capacity of three million stick cigarette per annum and will start its production within a year.

Though, it will create employment at a time when the economy is sailing through rough waters due to over-politicisation, it is also an indication that the Southern plains is growing more insecure for the industries.

"The industries in Terai are facing security problems due to mushrooming armed outfits after the end of a decade-long insurgency that has bleed the industries with extortion, abduction and violence blue," said Federation of Nepalese Chambers of Commerce and Industry president Kush Kumar Joshi.

One of the country's largest private sector enterprise with a turnover of over $100 million started its operations in 1986 with a single tobacco manufacturing factory in Simara of Bara district on the Nepal-India border as the Terai was the most preferred region for industries then.

To tackle the insecurity, the entrepreneurs have urged the government to set up Industrial Security Force. "The government had earlier agreed to set up Industrial Security Force, but it brought the new policy through the budget," he added.

However, the growing insecurity has forced the government to provide security to the industries, though Joshi claimed that the government's move is inadequate.

The government has in its budget for the current fiscal year announced to arrange a police post of five police personnel equipped with weapons to any manufacturing industry that offers employment for more than 500 Nepalis.

"However, Ministry of Industry is still working out on the draft of modality on providing security in line with budget," said the captain of the umbrella organisation of the private sector.

Surya Nepal that produces five brands of cigarettes was the second largest tax payer to the government in the last fiscal year.

Initially established as Surya Tobacco, the company has transformed itself as Surya Nepal in 2004 to diversify into garments manufacturing with its state-of-the-art plant in Biratnagar that produces John Player brand of clothing.

Top ten tax payers in the fiscal year 2009-10

1. Nepal Telecom -- Rs 9.66 billion

2. Surya Nepal -- Rs 5.93 billion

3. Gorkha Brewery -- Rs 3.09 billion

4. Spice Nepal -- Rs 2.07 billion

5. Nepal Investment Bank Ltd -- Rs 778.00 million

6. Nabil Bank Ltd -- Rs 747.44 million

7. Standard Chartered Bank Nepal Ltd -- Rs 655.67 million

8. Rastriya Banijya Bank Ltd -- Rs 611.95 million

9. Rastriya Beema Sansthan -- Rs 542.33 million

10. Everest Bank Ltd -- Rs 535.00 million