August 3, 2020 | Investopaper
Five sugar industries have been shut down recently due to lack of funds. Of them, three industries were closed last fiscal year. Last year, there were 13 sugar mills in operation across the country during sugarcane crushing, but this year only 10 were operational. According to the Sugar Producers Association, five sugar industries have been shut down in the last two to three years due to the economic crisis.
As per the association, Shri Ram Sugar Mills in Rautahat, Annapurna Sugar and General Industries in Sarlahi and Indu Shankar Sugar Industries, Lumbini Sugar Industries in Nawalparasi have been shut down. Less than a year after the start of production, the Himalayan Sugar Industry at Chandra Ayodhyapur in Siraha was shut down in 2074 BS due to shortage of sugarcane.
In the 30 years since the start of the sugar industry, 21 industries have been shut down so far out of the 31 industries in operation. The government-owned Birgunj Sugar Factory and Lumbini Sugar Factory have been closed for a long time.
It costs at least Rs 4 billion to run a sugar industry. One industry can employ 500 people. There is a plan to diversify the sugar industry by including all the farmers through cooperative model. Despite having the capacity to produce sugar as per the demand in the country, it has not become self-sufficient. Millions of rupees are being spent on sugar every year. Last year, the government imported 70,000 metric tonnes of sugar from India.
According to the Ministry of Industry, Commerce and Supplies, 250,000 metric tonnes of sugar is consumed annually. Out of the total consumption last year, 180,000 metric tonnes of domestic sugar and 70,000 metric tonnes were imported. Sugar is used as 60 percent industrial and 40 percent as food.
The Central Sugarcane Cooperative Union has brought three sweet bheli industries into operation. One hundred and seventeen industries across the country have been producing sugarcane and bheli.
Industrialists and farmers have been disappointed with the closure of Shri Ram Sugar Mills, which had been operating at a loss. The management has announced to close the first industry of Rautahat with the investment of Golchha and Vishal Group from Shrawan 11, 2077. The employees have not been paid for four months. Even farmers are shocked that they cannot get the price of sugarcane. The management has stated that the arrears will be paid by selling the property.
The industry, which was established two decades ago, was operating at a profit in the early years, but has been operating at a loss in recent times. The industry was completely shut down since Falgun 13. The industry has incurred a loss of Rs. 2.17 billion till the fiscal year 2075/76. The company has stated that the problem has arisen due to financial difficulties.