Rabi Dahal

Birgunj, March 27 :

Frequent bandhs and political upheaval in the country is hurting the leather sector of the country dearly.The leather industries are facing shortage of raw leather. Entrepreneurs associated with the sector said that the major reason for the halt in the import of raw leather is due to the worsening situation in the country.

The industries, already hit hard by the low demand of leather in the international market, have been damaged further by the shortage of raw leather.

Collection of raw leather from hilly regions have nearly stopped due to Maoists activities, informed Sanjay Giri to The Himalayan Times, chairman of the Association of Leather Industries of Nepal (ALIN). The association claimed that the shortage of raw leather as well as price hike in the market has been fatal for national leather industries. Chairman Giri said, "The price hike in raw leather has increased the percentage of investment in production." Half-processed and fully-processed leather goods are exported to India and other countries from Nepal.

At a time when Nepali products are finding it almost impossible to compete in the international market due to lack of adequate capital, the shortage of raw material has hit them hard. Leather products from India, Bangladesh and Pakistan have a good demand in the international market. Leather products from these countries are cheap and of good quality and this is the reason for the worsening market for Nepali leather products, entrepreneurs expressed.However, businessmen hope that there would be a 20 per cent increase in leather and goods export to third countries. But, increase in export has not made a big difference to businessmen due to the hike in input cost too, said Netra Mainali of Narayani Leather Industries.

Mainali added that the increase in input cost has decreased the profit percentage. In the current situation, it provides just enough to cover operation costs.The ALIN informed that insurgency and internal conflict has decreased the demand for leather products even inside the country. Even during Dashain, Deepawali and the winter season, known as the high-demand season for leather goods, sales refuse to pick up, informed chairman Giri.

According to the Commerce Office at Birgunj, total export of leather has increased by 46 per cent at the end of Falgun this fiscal year, compared to last fiscal year. Last fiscal year till the end of Falgun, 2.298 million square metres of leather was exported, while this year it stands at 3.367 square metres.