Govt may hand over mgmt of Nepal Orind Magnesite to Khetan Group

KATHMANDU, Jan 13:

The government is preparing to hand over the management of Nepal Orind Magnesite (NOM) to Khetan Group -- one of three equity partners - of the state-controlled firm.

The meeting of board of directors of NOM recently took the decision to this effect. It has forwarded the decision to the Ministry of Industry (MoI) for final approval.
“We have received the decision taken by the board meeting of NOM. We will take final decision on the issue soon,” a highly placed source at the MoI told Republica. “Given the growing financial burden on the government due to the virtually defunct firm, we are positive about handing over the management.”

The government holds 75 percent stake in NOM. Khetan Group and Orissa Industry - an Indian firm - hold 12.5 percent each.

Janmajaya Ragmi, chief of Public Enterprises Coordination Division at the Ministry of Finance, said the proposal to hand over the management of NOM to Khetan Group was under consideration.

Khetan group has proposed to bring in new technology as well as investment and restore the quarry which has remained closed for the last 15 years. The state-controlled firm produces magnesium products which are mainly supplied to India.

“NOM board has already decided to hand over the management to Khetan group. We are waiting for the response of the MoI on the board´s decision,” Dinesh Bhattarai, general manager of NOM, told Republica.

The NOM is based in Kharidhunga of Dolakha district.

Bhattarai further said it might take one and half years to restore production of raw magnesite, caustic calcined magnesite and dead burnt magnesite. The company has the capacity of producing around 60 types of finished products which are widely used for industrial and agricultural proposes.

The loss-making NOM has a cumulative loss of Rs 3.68 billion till the end of the fiscal year 2009/10. Its account hasn´t been audited since then.

The 35-year old company had closed operation 15 years ago after its products could not compete with cheaper Chinese products.

The company had set price of its finished products at US$ 160 per kg while Chinese producers were supplying magnesite at as low as $120 per kg in India.
“Our products can compete with foreign produces if we can bring down cost of production by bringing foreign technology,” added Bhattarai.

Source: Republica