Average Capacity Utilization of Industries in Madhes Province Falls to 29.60 Percent

July 2, 2024 | Investopaper

The average capacity utilization of the industries in Madhes Province has decreased in the first six months of the current fiscal year 2080/81. As per the study report on economic activities of Madhes Province published by Nepal Rastra Bank (NRB), the average capacity utilization of industries of Madhes Province is 29.60 percent. In the previous fiscal year 209/80, the average capacity utilization of industries was 54.25 percent.

The alcohol producing industry is at the top with average capacity utilization of 81.95 percent while the vanaspati ghee manufacturing industry has the lowest capacity utilization of 4.06 percent. Similarly, industries producing iron rod utilized capacity of 82.44 percent, soft drinks 29.72 percent, wheat flour 68.57 percent, among others.

Similarly, the total loan floated by the banks to the industrial sector of Madhes Province has decreased by 12 percent. Such loan as of Poush’s end 2080 BS has reached 1.12 Kharba which was Rs 1.14 Kharba during the same period of the previous year. Out of the total loan invested, Banks have disbursed the highest loan of 66.46 percent in the Parsa District alone. Likewise, the Saptari district has the lowest loan investment by the banks with 2.52 percent.

Madhes Province offers huge potential and opportunities for the growth of the industrial sector that includes:

–Availability of land for industrial expansion

–High population density

–Agriculture based industries

–Potential of creating industrial-based market as most of the area is connected with India.

–Easy access to market area due to industrial development.

Along with the promised opportunities, industries are facing a lot of challenges in Madhes Province.

–Lack of investment-friendly environment.

–Lack of Infrastructure development

–Lack of Quality control

–Unavailability of skilled manpower

–Lack of Investment-friendly rules and policies to attract Foreign Direct Investment