Aarti Strips to close down

Aarti Strips to close down
eKantipur.com, 13-Mar-2007
BY BINOD BHANDARI

Fed up with heavy loses and cancellations of orders due to regular strikes and bandas, Aarti Strips Pvt Ltd, the largest manufacturer of galvanized corrugated sheets in Nepal, has announced that it will be closing its plant in Nepal.

According to General Manager Roshit Unnithan of Aarti Strips, the company would soon be informing the Department of Industry about the decision and then move the plant to Indian cities of Guwahati or Kolkata. The company, which was established five years ago in Morang's Tankisinwari with an investment of Rs 2.8 billion from India's Bhusan Steel & Strips Limited, employs 288 Nepalis and Indians.

Unnithan told the Post that the recent series of events has caused cancellation of three months of orders worth millions. “There is always some kind of banda or strike going on. And, on top of that there is also a soaring power problem. We can't bear the loss any more and feel that our investment here is not secure anymore,” he said. Unnithan has put the figure of losses due to three months of strikes at more than Rs 60 million.

With an annual output of Rs 6 billion worth of sheets, Aarti Strips earned a profit of more than Rs 600 million in the last five years. The company, which exports 90 percent of its production, contributes Rs 250 million as revenue to the government annually. According to Unnithan, the plant consumes Rs 15 million worth of electricity and diesel monthly.

But the trouble for Nepal's economy does not stop here. There are indications that the problems cited by Aarti Strips could spark a mass exodus of other industries as well. A source told the Post that other industrialists in Biratnagar are also preparing to follow suit and move their investments to India. The source also revealed that more than half a dozen industrialists from here have already started investing in India. Other reasons cited by them include labor strikes and being forced to make donations and financial contributions.