Thursday, 18 June 2015

Nepal Footwear industry faces raw material shortage

Nepal’s footwear industry is running out of raw materials as the customs office at Tatopani, the main entry point for Chinese imports, has been out of service since the April 25 earthquake.

The clearance of shipments through Tatopani has stopped with the Chinese authorities saying that the bridge connecting Nepal and China had sustained extensive damage and cannot be used.

The government has requested China to help clear the hundreds of stranded trucks carrying Nepal-bound goods before the rains further damage the barely operational roads.

Manufacturers said that production would be affected badly if the situation continued for another month. About 60 percent of the raw materials used by the domestic footwear industry come from China, and Khasa is the main route for the shipments.

“Shoe factories have been struggling to get raw materials after the earthquake as most of the containers are stuck on the Chinese side of the border and new containers are not coming over that route,” said Manoj Shrestha, general secretary of the Leather Footwear Manufacturers Association (LFMA).

He added that the production process would be affected as around 30 types of raw materials were needed for making footwear.

According to him, raw materials like leather, Rexene, lining, inter-lining, PVC sole, nylon net, rubber, elastic, lace and chemicals are imported from China.

Shrestha, who is also the chairman of Sky Shoes, said the company had not been able to produce enough stock for the Dashain-Tihar festive season which accounts for 30-35 percent of their annual sales. This could result in price rises of one of the largest selling goods during the festive season.

Ram Krishna Prasai, managing director of Shikhar Shoes, said that they would be out of raw materials in two weeks. “At a time when we have just started our operation after a month’s gap due to labour shortage after the earthquake, we are facing a shortage of raw materials,” he said.

“We have to plan for Dashain two-three months in advance, but we fear that our Dashain sales will be badly hit.”

Manufacturers have urged the government to take the initiative to reopen the border. “Some manufacturers are about to shut down their plants due to lack of raw materials. So the government should help to bring the containers within a week as there are possibilities of landslides when the rains start,” said Homnath Upadhyay, former president of the LFMA and managing director of BF Dear Hill Shoes.

According to him, 250-300 containers are stranded at the customs point. “My 30,000 pairs of soles are stranded in the border area,” added Upadhyay.

According to the association, the domestic footwear industry produces shoes valued at Rs10 billion annually. Domestic products account for 65 percent of the total footwear market.
http://www.ekantipur.com/2015/06/18/business/footwear-industry-faces-raw-material-shortage/406722.html

 
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