January 31: A feasibility study report prepared by the Nepalese Army has pointed out the prospects of reviving the now-defunct Hetauda Textile Industry on condition that the government provides policy and legal support.

During a high-level meeting held at the Office of the Prime Minister and Council of Ministers on Wednesday, the NA briefed the prime minister about the feasibility study regarding the resumption of the factory.    
The feasibility study was prepared following the government’s announcement to explore possibilities for reviving the closed industries in the current fiscal year’s policies and programmes.    
The textile factory that was established in 2032 BS with financial and technical assistance from the Chinese government and with the investment of the Government of Nepal halted its production in 2056 BS. The then royal government in 2059 BS decided to close it.    
The study report highlighted the lack of market management, lack of technology advancement as per the need of time, the power outage issue, overstaffing and the lack of managerial efficiency among the factors leading to the closure of the factory.    
The report states about the possibility to reuse some factory structures and machinery after maintenance. It is stated that NA Welfare Fund has sufficient budget to operate the industry, adding that most of raw materials needed for the factory are available within the country. According to the report, the factory will have no problem for market if revived as the NA will be one of the major potential consumers with NA personnel being likely users of garments to be produced by the industry.    
The factory has 166 ropanis of land under its ownership.    
The report states that the revival of the industry is needed to contribute to the national industrial development and to contribute to gross domestic product, to send a positive message to the world market, to boost up self-sufficiency of the nation, and for import substitution and creation of employment opportunities.    
The study taskforce has also proposed the outline for re-operation of the industry. The proposed plan along with a three-year work plan has set the target of manufacturing approximately 2.6 million metres of cloth.

A policy decision regarding this would be made in the current fiscal year and the industry would be handed over to the Nepalese Army, which will prepare the DPR, and select and purchase new machinery.    
Similarly, it is stated in the proposed outline that test production would be started in the coming fiscal year by completing the construction of the infrastructure and purchase of machine and equipment. It is stated that the machines would be added, the industry's capacity expanded and regular production started by conducting the feasibility study for the operation of Butwal Spinning Mills and managing the raw materials.    
The preliminary cost estimate for re-operating the industry is Rs 1.93 billion and the annual operation cost is expected to be around Rs 780 million. The taskforce has concluded that the industry will be in a position to make profit, replacing the investment cost, after nine years of its re-operation.    
The taskforce has also proposed for policy and legal support from the government for the re-operation of the industry. -- RSS