Gorakhkali stops operation due to lack of raw materials

GORKHA, AUG 16 -

Gorakhkali Rubber Udyog (GRU), the country’s only tyre factory, has stopped operation due to lack of money to pay for raw materials imported from India.

State-owned GRU has been perennially strapped for cash and plagued by labour unrest. Company officials said that each day the factory remains closed means a loss of Rs 500,000.

Senior procurement official Dhiresh Giri said the company’s trucks and containers loaded with raw materials had been stuck at Raxaul and Kolkata in India for the last two months as they were unable to pay for the imports and clear them through customs.

The factory imports most of its raw materials. “The factory was forced to stop tyre production from last week as raw materials have not arrived,” Giri said.

According to him, eight trucks and three containers have been stuck in India. “We need at least Rs 10 million to clear the consignment.” The management is also trying to ask the government to bail it out.

The raw materials awaiting clearance at the border are enough to produce 3,000 tyres and keep the factory in operation for at least 20 days.

Dinesh Bataula, general manager of GRU, said that the concerned ministry was positive about providing funds to release the consignment. “However, it’s not yet decided when the cash will be made available,” he said.

Meanwhile, the company has been trying to borrow money from Salt Trading as it is uncertain whether the government will provide a loan. Bataula said that the factory needed at least Rs 50 million to stay afloat for a few months.

“We have requested the government for funds to keep the factory operating smoothly,” he said. A few days ago, the company had released three containers of raw materials with loans received from Salt Trading.

The company has been incurring massive losses due to falling production. Officials said that even if the raw materials were released immediately, it would take more than a week to resume operations at the factory. It employs around 300 workers.

Source: The Kathmandu Post