Hima BK

KATHMANDU: With the recent legal changes allowing older industries to relocate to the Special Economic Zone (SEZ), established business houses in Nepal are setting up factories within these zones set up with incentives to promote exports.

The initiative will begin with the Chaudhary Group, known for Waiwai noodles, and the Goldstar shoe brand. Both companies are planning to establish their factories in the Bhairahawa and Simra SEZs.

The amendment to Section 7 of the Special Economic Zones Act, 2073, now permits already registered and operational industries to move to the SEZ. Consequently, CG Foods under Chaudhary Group and Kiran Shoes Manufacturers, the manufacturer of the renowned Goldstar shoes, are relocating to Simra and Bhairahawa SEZs, respectively. The Special Economic Zone Authority of Nepal recently issued a call for proposals from industrialists to establish and operate industries in these SEZs.

On May 12, the authority requested proposals for setting up industries in Block 'A' of Bhairahawa and Simra SEZ. In response, CG Foods of the Chaudhary Group applied for six plots in Simra Block 'A' to produce noodles and Bhujia.

Since CG Foods is already registered and operational, they plan to open their factory within six months of the application. Similarly, Kiran Shoes has proposed to start production within the same timeframe.

Acting Executive Director of the Authority, Tulsiram Marasini, explained that these already operational industries will directly commence production. He confirmed that CG Foods' Waiwai noodles and Kiran Shoes’ Goldstar brands have been registered.

To facilitate investment, the government amended various laws and ordinances, including the Special Economic Zone Act, 2073, to promote investment facilitation. This replacement bill has now been submitted to Parliament.

Prior to the amendment, Section 7 of the Special Economic Zones Act, 2073, prohibited the transfer and operation of existing industries within SEZs. The amended clause now allows these transfers, enabling investors to move their machinery and equipment into SEZs to operate their industries.

Sagar Silwal, a sub-engineer of the authority, reported that 26 industries have applied to establish operations in Bhairahawa and Simra SEZ following the amendment. This marks the highest number of applications since the amendment of the Act, with CG and Goldstar's participation expected to enhance the industrial activity in SEZs.

CG Foods has proposed producing 1,000 metric tons of Waiwai noodles and 1,500 metric tons of Bhujia annually in Simra SEZ, with an investment of Rs 22 million. Kiran Shoes Manufacturers Pvt. Ltd. plans to invest Rs 540 in Bhairahawa SEZ to produce 9.6 million pairs of shoes and slippers annually, also within six months.

Kiran Shoes aims to increase its share of footwear exports to India, which has decreased from 70 percent to 30 percent. Targeting the Indian market, the company chose to establish its industry in Bhairahawa, close to the border.

The authority received 12 proposals, including Goldstar, for Bhairahawa SEZ with a total investment proposal of Rs 7 billion. Goldstar is the largest of these industries. Other proposals include hubs for herbs and iron production.

In Simra, 14 industries, including Waiwai, submitted proposals totaling an investment of Rs 12 billion.

Currently, 'A' blocks of Bhairahawa and Simra are already operational with 136 plots ready for industrialization. In Bhairahawa SEZ, five out of 68 plots are operational, with two under construction. Simra SEZ has 11 operational plots.