Capacity utilisation of Nepali industries slumps to 40pc



The industries in the country utilised only 40 per cent of their installed capacity in the six-month period between Mid-July 2019 to mid-January 2020, reveals the Economic Activities Study Report 2019-20 (Half Yearly) unveiled by Rastra Bank today.

The results reveal a slump of 20 percentage points in capacity utilisation of the industries compared to the capacity utilisation of 60 per cent in the corresponding period of previous fiscal 2018-19.

The findings are even more worrying as the study covers the period before the coronavirus pandemic, which means that the industrial capacity utilisation is expected to take a further hit in the study of this fiscal year.

Among the 154 industries included in the study, the liquor industry had the most capacity utilisation at 92.1 per cent.

Of the industries included in the study, the capacity utilisation of industries related to mustard oil, soybean oil, rice, flour, chocolates, noodles, liquor, synthetic clothes, jute goods, paint, medicines, cement, among others went up.

Conversely, the capacity utilisation of industries related to ghee, processed milk, animal feed, biscuits, processed tea, beer, cigarettes, threads, garments, processed leather, paper, soaps, plastic items, bricks, concrete, steel rods, aluminium, tyres and tubes, among others, decreased.

While ghee, oil, jute goods and cement are the top manufactured goods in Province 1, Province 2 had most production of paper, cigarettes, clothes, processed leather, medicines and steel rods.

Production of processed milk, animal feed, pashmina, readymade garments, medicines is high in Bagmati Province. In Gandaki Province, biscuits and noodles had high production, while in Province 5 there was high production of mustard oil, flour, beer and medicines and in Sudurpaschim Province, flour, among other items is mostly manufactured.

The study has revealed that the credit flow to various industries in the review period rose 17.3 per cent and reached Rs 1.06 trillion.

In the corresponding period of the previous year, credit growth had stood at 12.6 per cent. The share of credit flow to the industries stood at 33.9 per cent of all credit extended b

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