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Ministry of Commerce And Supplies - Enhanced Integrated ...

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N T I S2010Index 3: Domestic Supply ConditionsProducers: Out <strong>of</strong> about 300 registered cottage and small-scale paper and paper product industries, 259 arein operation. 51,52 There are 40 manufacturers <strong>of</strong> finished paper products and more than 300 firms involved inexporting paper or finished paper products. Many paper-making units are run by rural local entrepreneursand more recently by CFUGs and farmers’ cooperatives.Production Capacity: About 2.9 million ha <strong>of</strong> suitable lands are available for Lokta plantation in 55 districts. 53Currently, production <strong>of</strong> handmade paper is located in 22 districts and the production volume is estimated at15,000t. 54Quality <strong>of</strong> Product: The fibre from the high altitude plant makes the Nepali Lokta paper very sturdy andunique--different from those produced in China, India, Philippines, and Thailand. The production process isnot mechanized, and each paper sheet is dried naturally in the sun and wind.Productivity: The productivity can be further increased to reduce the Lokta requirement for production <strong>of</strong>handmade paper, e.g. through the introduction <strong>of</strong> new tools, such as improved boilers and modern waterpipe systems. Such an improved system could result in an estimated reduction <strong>of</strong> the Lokta requirements byaround 30 per cent.Availability and Quality <strong>of</strong> Labour Force: Papermaking is not a highly skilled job. Semi-skilled workers areavailable and paper products workers are trained on-the-job. There seems to be no problem attracting newworkers to the industry.Labour Cost and Overall Production Cost: Because <strong>of</strong> rural locations, labour costs in paper making are lowerthan labour costs for the making <strong>of</strong> finished paper products. Semi-skilled workers required for finished paperproducts are trained by entrepreneurs. According to GTZ (2007), production costs in Nepal are lower than fora comparable product in Thailand.Level <strong>of</strong> Processing Technology: Traditional technology is a unique selling point. Some improvements inproduction process are required to reduce wastage. Quality and design also need to be improved.Cost and Quality <strong>of</strong> Infrastructure: Papermaking is highly water–intensive, but the cost <strong>of</strong> water in ruralproduction centres is very low. Locally available fuel (firewood and bio-mass) is used in boiling Lokta and thecost is low.Efficiency <strong>of</strong> Domestic Supporting Industries: Papermaking units receive Lokta from local farmers or CFUGsduring the season. Paper product producers have found their paper suppliers efficient in terms <strong>of</strong> delivery inrequired specifications and quantity.Domestic Demand: About 90 per cent <strong>of</strong> the paper output <strong>of</strong> the country is used by paper productmanufacturers for further value addition and export thereafter. Current domestic demand for paper productsis likely to increase because the GoN has recently decided to use Nepali paper for citizenship certificates.Business Environment: According to entrepreneurs, the quality <strong>of</strong> infrastructure and credit facilities is quiteacceptable.Government Initiatives and Donor Involvement: The Department <strong>of</strong> Cottage and Small Industries hasextended technical and training support to papermaking enterprises in the past. The sector also receives51TEPC, Trade News Service, Year 3, No 7, 2065, p. 5.52Nima Sherpa, Acting President <strong>of</strong> HANDPASS.53Bibendra Prasad Singh, Nepali Paper Industry, Lokta: An Introduction, SMARIKA, HANDPASS, 2062, p. 2.54TEPC, Trade News Service, Year 3, No 7, 2065, p. 5.66NEPAL TRADE INTEGRATION STRATEGY 2010BACKGROUND REPORT

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