Kathmandu, January 16:

In a major development for Nepal’s readymade garment sector, Surya Nepal Pvt Ltd (SNPL), a subsidiary of India’s leading business conglomerate ITC Ltd, is all set to establish its own garment manufacturing unit at the eastern industrial hub of Nepal.

The factory to be set up on Dharan Road at Tankisinwari VDC, Morang on about 10 acres of area will have the state-of-the-art technology production facility, said Harsh Madhav Dar, managing director at SNPL, at a press conference today. He said that the estimated initial investment will be Rs 250 million.

“Although we had plans to expand our activities in the area of garment manufacturing, we couldn’t undertake it earlier on account of the socio-political situation and the labour environment prevailing in the country,” said Dar, adding that the plan to set up a new factory received a green signal only last month.

He stated that SNPL came up with this project keeping in mind the unfolding socio-political and economic scenario. “The emerging growth opportunities in India and the domestic market as well as other markets abroad have encouraged us to expand our activities,” he added.

According to him, construction work has already commenced from yesterday (January 15) and the unit is expected to become fully operational by November 2007. Existing machines and workforce in the leased premises will shift to new locations over a period of time, he said.

The facility will house machinery and world-class infrastructure to support manufacture of up to 7,000 shirts and 1,200 trousers daily in two shifts, Dar informed. The premises will have factory building, warehouse, worker conveniences, office block, and will be compliant with all environment, health and safety requirements.

“SNPL will make further investment for future expansion to cater to increased demand. Investment will be in a phased manner over the next few years keeping in mind growth demand as well as of the unfolding labour scenario,” said Dar, adding that SNPL will be in a position to expand capacity to four times of its current production level, provided there is a positive and flexible labour outlook.

SNPL diversified into garment business nearly four years ago by exporting apparel products from Nepal to India. The company commenced production some two years back on a leased premise with state-of-the-art manufacturing facility. Till date the company has invested over Rs 160 million and exported nearly 4.0 million pieces of readymade garments to India worth a cumulative value of Rs 1,600 million.

In October 2004, SNPL started marketing branded men’s wear under the brand name - John Players. “Till date, we have sold over 100,000 pieces in Nepal and command over five per cent share of the total domestic apparel market,” Dar claimed.