Footwear plants hit by lack of fuel, materials
Domestic shoe manufacturers said that while raw materials imported from China and India are stuck at the Nepal-India border, a shortage of fuel to run their generators has hampered production.
Footwear companies traditionally launch new shoes and festival schemes for customers before the holiday season, but only a few of them have done so this year.
Meanwhile, retail business has also been affected due to a drop in vehicular movement because of the fuel shortage. According to traders, 30 percent of the total sales happen during the festival season. The domestic footwear industry produces shoes valued at Rs10 billion annually.
Rabindra Shrestha, president of the Footwear Manufacturers’ Association of Nepal, said many plants were on the verge of closure due to lack of raw materials and diesel.
“We have to import raw materials from India and China, but the Tarai unrest has cut off our supply routes for the past two months. Besides, the border points have been sealed for two weeks,” he said. He added that manufacturers were incurring losses as they had to repay bank loans. Shrestha, who is also the director of Coseli Shoes, said they hadn’t run any promotional campaigns due to the unfavourable market condition.
Likewise, Sky Shoes said that it was operating at 20 percent of capacity citing a shortage of raw materials and fuel. Manoj Shrestha, director of the company, said that they would be compelled to shut down operations if the situation continued for another few days. “Business is totally down, and we are worried how to pay Dashain bonus to our staff,” said Shrestha.
Homnath Upadhyay, managing director of Base Footwear which manufactures BF Dear Hill Shoes, said that they had been suffering a downturn since the April 25 earthquake. “We started bringing raw materials imported from China through Kolkata port as the Tatopani Customs Office has been out of service since the April 25 earthquake, but that route too was blocked by the Tarai unrest,” said Upadhyay.
According to him, raw materials like leather, Rexene, lining, inter-lining, PVC sole, nylon net, rubber, elastic, lace and chemicals are imported from China. He said that they were not able to ship their products to their retailers due to lack of fuel.
Pramod Mahato, managing director of Samrat Shoes, said that they were operating at 60 percent of capacity. “This should be the busiest time for us as Dashain is less than a week away, but customer flow at retail shops is down due to low vehicular movement,” said Mahato.