The domestic industries have been utilising only a little more than half their capacity, according to a report.
"Capacity utilisation of Nepali manufacturing industries stands at 57.83 per cent," according to the central bank. "A fiscal year ago in 2011-12, the capacity stood at 57.79 per cent, not much different from the current study."
The study carried out in eight major cities and surrounding areas covering 47 districts revealed that the industrial environment has not yet improved due to prolonged political transition and power crisis, though the country has seen less labour trouble recently.
The study carried out research of industries producing some 23 products including vegetable ghee, cooking oil, rice, wheat flour, biscuits, sugar, noodles, animal feed, processed tea, beverages, liquor and cigarette in Kathmandu, Biratnagar, Janakpur, Birgunj, Pokhara, Siddharthanagar, Nepalgunj and Dhangadhi and surrounding areas. Likewise, the study also took stock of cotton textiles, woollen garment, pashmina, garment, paper, soap, brick, cement, iron and steel and electric wire manufacturing units.
The study 'Economic Activity Report 2012-13', claimed that noodles factories saw highest capacity utilisation of 87.4 per cent, whereas rice factories recorded only 22.1 per cent.
Likewise, the report also revealed a big downfall in paddy production in the last fiscal year has contributed to the dismal performance of rice factories. "The state of rice industries will be better this year as rice production is expected to be better this year."
The report also forecast that noodles, biscuits and light beverages industries will witness a positive growth this year also due to increased consumption habit and rising living standard of the people that has changed consumption pattern.
The manufacturing of soybean oil, rice, wheat flour, animal feed, biscuit, sugar, noodles, refined tea, liquor, beer, refined leather, resin, medical products, plastic products, brick, cement, iron and steel, GI wire, metal utensils, aluminum products and footwear posted growth in terms production capacity in the last fiscal year, whereas production capacity of vegetable ghee, mustard oil, dairy products, light beverage, thread, synthetic apparels, jute products, wooden products, paper, electric wire and cable, and tire and tube dropped.The report also identified which district boosts of what type of products. Kathmandu and its surrounding area mainly produces refined milk, pashmina, noodles and footwear, while Biratnagar produces ghee and oil, daily essentials, jute products, metal products and cement. Similarly, Janakpur produces sugar, liquor, paper and cement, whereas Birgunj mostly manufactures refined milk, animal feed, light beverage, cigarette, leather, apparels, cement, refined lather and medical items. Pokhara mostly manufactures biscuit, noodles and rubber, while Siddharthanagar produces wheat flour, light beverage and cement, and Nepaljung manufactures mustard oil, wheat flour and rice. Dhangadhi has more industries of wheat flour and resin.