Tuesday, July 12, 2022

Domestic industries yield 42 per cent value addition

Kathmandu, July 8

The number of industrial enterprises in Nepal has reached 60,185 by March 2020, concluded the National Industrial Survey 2020 published by the Central Bureau of Statistics (CBS) on Friday.

There are 56,611 enterprises in industrial manufacturing, 356 in mines and minierals, 994 in electricity, gas and air-conditioning, and 2,224 in water supply, sewarage, and waste management and its treatment.

The CBS said that 491,227 people are involved in these industrial enterprises – 6485 in mines and minerals, 444,964 in manufacturing, 21,593 in electricity, gas and air-conditioning, and 18,185 in water supply, waste management and treatment sector.

However, the number of employees and workers getting regular salary and wages is only 381,687.

All the industrial establishments have spent about Rs. 107.89 billion in salaries and wages – including cash, goods and other facilities –  in the reference year 2020. Of the total amount paid for the salary and wages to the employees and workers, enterprises in mines and minerals sector mobilised Rs. 1.8 billion, industrial manufacturing Rs. 95.77 billion, gas and air-conditioning Rs. 6.92 billion and water, sewarage and waste management Rs. 3.4 billion.

Likewise, the enterprises with the fixed assets worth Rs. 619.5 billion have produced goods and services of Rs. 1201.17 billion by spending Rs. 846.66 billion cost investment. It means, the total value addition was Rs. 354.51 billion – about 42 per cent.

Capacity utilisation

About 76 per cent enterprises had run for more than 270 days, 19 per cent 180-269 days, 4 per cent 90-179 days and 1 per cent less than 90 days.

But only 39.9 per cent industries had run in their full capacity and 18.7 per cent enterprises utilised 75-99 per cent of their capacity while 29.1 per cent of them ran in 50-74 per cent capacity.

About half of the industries (46 per cent) cited lack of demand and market for their inability to optimise the maximum capacity of the production plants. Similarly, insufficient raw materials (10 per cent), lack of resources (8 per cent) and shortage of skilled manpower (8 per cent) were other reasons.

Access to finance

The survey has found that the small manufacturing enterprises – having less than 10 workers - have poor access to finance with only 34 per cent of them obtaining loan from the financial institutions. One per cent of them have received the commitment for loan mobilisation while 5 per cent are in the process of receiving loans.

Number of large industries has increased by 23 per cent in a decade. There were 4,076 large enteprises in 2010 which has gone up to 5,017 in 2020. Likewise, the number of people involved in these institutions has increased by 41 per cent in the past 10 years to reach 288,170. The average number of people involved in an enterprise is 57. It was 50 in 2010.

Deputy Director General of the CBS Dr. Hem Raj Regmi said that although the reference year was set for 2020, the survey was conducted in the last fiscal due to the COVID-19 pandemic.

The report also revealed that the first lockdown in 2020 caused the complete closure of 63 per cent enterprises, 24 per cent could run partially and only 13 per cent were operated in full capacity.

Likewise, about 17 per cent employees and workers were forced to leave their work without any facility.

Published in The Rising Nepal daily on 9 July 2022. 

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