August 18: The sack industries of Nepal, whose production had taken a nosedive due to lack of raw materials amid Covid-19 crisis, have now started operating at 80 percent capacity.

Even though there is no shortage of raw materials at present, the industries have not been able to produce at their full capacity due to the lack of skilled workers and declining consumption in the market. 

There are about two dozen industries in Nepal that produce bags, sacks and tents of plastic, jute and cloth. These industries provide sacks to all the cement industries as well as food-packaging industries in Nepal. Sudip Jaiswal, proprietor of Pashupati Seal Pack Industries in Biratnagar, told New Business Age that the industries were forced to operate at 80 percent capacity due to lack of skilled workers. 

According to him, most of the workers working in such industries come to Nepal from India. Due to the pandemic, most of the Indian as well as Nepali workers have not been able to work due to which the industries have not been able to operate in full capacity. 

Similarly, the industries are facing more problems as the consumption of sacks and tents is declining. According to Nikhil Todi, operator of Shivam Plastic Industries, their consumption has declined as the cement and food grains industries have not been able to operate in full capacity. Moreover, he said that the consumption of bags has decreased not only in Nepal but in the Indian market as well. 

Nepali sack industries produce about 60,000 metric tons of sacks annually. Of them, 40 percent of the sacks are consumed in the domestic market and the remaining 60 percent are exported to other countries including India, Bangladesh, Pakistan and Bhutan. The export market of these industries has become chaotic as the production and consumption has declined. 

Price of Bag Doubled 

The market price of sacks and bags has doubled this year compared to last year due to the rise in price of raw materials as well as increase in wages of the workers in the wake of Covid-19 pandemic.

According to the industrialists, the production cost of such items has increased by 25 percent this year. The price of a cement bag that used to cost Rs 13 including VAT has now increased to Rs 26.