Old machines hit jute mill production

BIRATNAGAR, DEC 30 -

Biratnagar Jute Mill will have to wait for two more years to start a full-fledged production. Although the factory’s production capacity stands at 40 tonnes a day, it is producing just 14 tonnes due to old machineries.

The mill, which remained closed for eight years, resumed operations four months ago after India’s Winsome International leased it for 25 years. The government leased out the factory on condition that would provide Rs 13.5 million annually for the next 25 years, according to Shyam Paudel, managing director of the mill.

Winsome operates five big jute mills in Bangala, Purniya and Samastipur in India.

Paudel said a total of Rs 180 million has already been invested in the mill and they were preparing to invest an additional Rs 40 million to install new machineries. “Since the machineries are old, we have not been able to run it in full capacity,” he said.

Established in 1937, Biratnagar Jute Mill was the country’s first production plant. The government has 46 percent share in the mill, while the general people have 54 percent investment.

The government had handed over the mill to Golchha Organisation in 2002 for operation under a five-year management contract. But Golchha failed to run the factory due to political intervention and labour issues. Subsequently, the government shut down the factory after spending Rs 550 million to pay off its 2,000 employees.

The jute factory, spread on 60 bighas, has a powerhouse and a railway yard that is connected to India’s Jogbani railway station. Currently, there are nine jute mills in Eastern Nepal. Of the total production, 90 percent is exported to India. Around 70 percent of raw materials are imported from India and Bangladesh.

Source: The Kathmandu Post