Kathmandu, Apr. 12: Janakpur Cigarette Factory (jcf) was on the verge of closure about three years back. But it now contributes revenue of Rs 442,707,000 to hmg.

Jcf, which paid the maximum revenue of Rs 471,000,000 in 1991-92, suffered a loss of Rs 110,000,000 in 1996-97.

General manager Hari Gautam attributes the dismal performance by the factory at the time to inefficient management.

Besides, the management and employees were under the false impression that there was no competitors, and jcf would survive whatever the quality of its product. The management could not pin-point effective ways of running the factory.

After the restoration of democracy, people started to talk of rights, but not of duties and responsibilities. This was the main reason the factory nearly closed, according to Gautam.

The factory, set up by the first elected government of the Nepali Congress in 1960, was once the most successful and the biggest in the mid-Terai region. It made significant contributions in terms of revenues.

The losses that the factory incurred continuously since 1993-94 reached Rs 110,000,000 in l996-97. With improvement in management and efforts to regain the lost market, it is not incurring any loss at present.

The factory first started production 37 years ago and now produces five cigarette brands.

With no profits, the factory could afford replacement, repair and maintenance of machinery to produce only 10,000,000 cigarettes daily in two shifts.

Jcf’s annual requirement of tobacco is 2,500 tons, and the domestic supply meets only 25 percent of the demand.

Tobacco has been grown in Sarlahi, Siraha, Dhanusha and Mahottari districts with the cooperation of the tobacco development and research centre, Belachapi. Fifteen to 20 thousand farmers are engaged in the tobacco cultivation, it is learnt.

The factory imports a large quantity of tobacco from India. One kilogram of tobacco is sufficient to produce almost 1,000 sticks of cigarette. The average cost of production of all brands is Rs 0.51 per cigarette.

Owned solely by hmg, jcf occupies a sprawling area of 36 Bighas at Janakpurdham, Dhanusha district in the central development region. Its assets throughout the kingdom total over two billion rupees.

Production increased by 6.18 percent, sale by volume by 7.34 percent, sale by value by 12.37 percent, and revenue by 9.43 percent in 1999-2000 as compared to 1998-99.

Under the erstwhile Panchayat regime the main function of jcf was felt to be to provide employment, general manager Gautam says adding that the number of employees has now been reduced from 2,800 to 1,853. The factory could be run efficiently with just 1,000 employees.

He adds “the management should not be changed frequently if the factory is to run efficiently. The wrong notion here seems to be that the management is the sole factor. There have been l0 general managers during the last ten years.”

From the production data, it can be seen that 251,640,000 sticks were produced in the month of Falgun, an increase of 52.70 percent over the preceding month.

Likewise, 206,716,000 sticks were sold and Rs 105,868,214 received from the sale. Sale increased 13.37 percent over the previous month.

The other cigarette factories in Nepal are Surya Tobacco Company, Nepal Tobacco, Seti Cigarette Factory and perfect blend. These produce six different brands.