Established in 1995 by Chandi Raj Dhakal, a former president of the Federation of Nepalese Chambers of Commerce and Industry, the factory had a workforce of 2,000. A majority of the employees left the company after it sank into problems. Before it was shut down, there were around 250 workers still remaining.

“The company was not able to pay the workers who remained,” said a former worker. “It had to shut down as it couldn’t to pay the salaries.” Momento Apparels started with an initial investment of Rs 100 million and now owns assets worth Rs 1 billion. With the factory closed, machinery and equipment worth millions of rupees will go to waste.

“Mounting losses and labour unrest were the main reasons why the company collapsed,” said manager Tika Raj Dahal. “The management had no option but to shut down operations.”

According to a source, the company owed millions to its workers and it paid them off a few months ago. Likewise, it owes huge debts to banks.

Apart from the hassles created by the workers union, load-shedding and international competition were the other causes behind the company’s demise. Life became hard for Nepali garment exporters after the US ended the quota system in 2005. Nepali producers were unable to compete and shipments fell.

“Things might not have become so bad if there was no labour problem,” said Rajendra Ghimire, former president of the Jhapa Chamber of Commerce. According to him, the garment industry also suffered due to the government’s neglect. Momento Apparels used to export readymade garments to the US and a number of European countries. Before it went belly up, its only market was India.