RMG industries not so excitedReadymade Garment (RMG) industries based in Sunsari-Morang Industrial Corridor are yet to recover from the downturn resulted by the scrapping of the quota system globally in 2005.
Readymade Garment (RMG) industries based in Sunsari-Morang Industrial Corridor are yet to recover from the downturn resulted by the scrapping of the quota system globally in 2005.
Nepali readymade garments, which used to enjoy quota in the US, had to compete with products from other countries like India, China and Bangladesh and suffered as a result due to lack of competiveness.
Entrepreneurs who were euphoric when the US government provided duty-free access to US for Nepali garment recently, are still not sure about making additional investment in the sector as they feel appropriate environment has not been created yet.
Particularly, the entrepreneurs are concerned as the US facility does not incorporate most of garments that Nepali manufacturers produce currently. Rajendra Raut, owner of Sangrila Garment said he cannot not open his closed factory just because the US has given duty-free access. His factory has remained closed for 16 years.
Sangrila used to employee 1,200 individuals and was established with an investment of Rs120 million.
Around 90 percent of its production used to get exported to the US, but after the scrapping of the quota system, he had to close down the factory, he said. “We should not be elated with the recently announced duty-free access because the US offers such a facility to only goods that are low in demand in its market,” said Raut. Surya Garment which used to employee 600 workers has been closed for the last six years. When operated in full capacity, the factory used to produce 4,000 shirts a day. The products of the factory, established 13 years ago with an investment of Rs 600 million, were exported to the US, India, Italy and France, among others.
About 1,500 workers lost their jobs when JD Apparel closed down. Easy Wear Garments Factory, which used to employ 700 women, was also shut. Others in the corridor closing down include Ulike Garment, Unique Apparel and KTM Apparel.
Shiva Shankar Agrawal, president of Morang Industry Association, said the government should help rehabilitate the closed garment factories by offering special packages.
In the last 10 years, more than two dozen garment factories in the corridor have closed down and around 20,000 workers have lost jobs. After losing jobs, majority of male labourers went for foreign employment, the females have become housewives.