Kathmandu, May 9: The Bhrikuti Pulp and Paper Mill is now feeling secure in the domestic market following a provision in the Indian budget this year to levy an 8 per cent production duty on cheap paper at a time when such paper is affecting the market here.

But the Indian budget this year has also levied an 8 per cent counter value duty and 4 per cent Additional Special Duty (Asd) on goods imported from Nepal. Consequently, difficulty has arisen in the export of Nepalese goods to India.

The tax on goods exported from Nepal to India, which used to be 8 per cent, has now reached 20.64 per cent.

The Bhrikuti mill has been exporting over 35 metric tons of paper to India a year. The mill was on the verge of closure in 1992. But before that it had succeeded in raising its annual production to 10,112 mt.

Established in 2049 (1992-93) with the technical and financial cooperation of the People’s Republic of China, the mill was privatised in 2049. The Golchha Organisation, the Kabra Group, and a British company, Intermatch Ltd, purchased the mill for Rs 225 million.

Following privatisation, the mill’s name was changed to Bhrikuti Pulp and Paper Mill. It had commenced production from January 1993.

Sixteen public sector undertakings including this mill were privatised after hmg took up its liberalisation and open market policy in the wake of the restoration of democracy. These undertakings were becoming a burden for the government.

Bhrikuti Pulp and Paper mill exemplifies the enormous progress recorded by loss making enterprises following privatisation.

The mill suffered a total annual loss of over Rs 30,000,000 some l8 years ago. But it turned around and paid Rs 278,380 in revenue to hmg in 1996-97. It now directly employs more than 582 persons.

When the mill was privatised, the workers felt job insecurity. But now they say they feel more secure.

Those who had left their jobs voluntary then have now rejoined the mill’s workforce, according to general manager Keshav Lamichhane.

When it was established, the daily production capacity of the mill was 13 mt and this was down to 7.8 mt a day by the time it was privatised. But capacity has now been increased to 18 mt, and a 70 mt capacity machine has also been installed, it is learnt from the management.

Daily production has now reached 28.14 mt. A 50 mt capacity plant has also been installed to recycle scrap paper and manufacture quality paper from various types of waste paper.

With the recycling of scrap and waste paper, felling of trees for raw material has decreased at the local level.

A 70 mt capacity machine with a digester and washing and bleaching functions in four phases produces pulp of high quality.

A range of papers from 38 to 40 gram thin to newsprint and maplitho are manufactured.

The mill also exports 800 mt of pulp to Japan annually.

Before privatisation, there was a shortage of experts at the mill. At present foreign consultants are working there to bring about all round improvements. Additional machinery has been procured to increase capacity further, according to the general manager.

The average annual production is 10,000 mt. This will be increased to 15,000 mt from this year, it is learnt from mill sources.

The daily production capacity is 88 mt at present. But the mill has not run to full capacity due to lack of raw material.

The general manager further says that the annual requirements of straw, bran and grass, the main raw materials, are procured from districts stretching from Saptari to Kailali.

Meanwhile, local people allege that effluents and emissions discharged by the mill have been degrading the environment of the area.

But general manager Lamichhane says pollution caused by smoke from the mill chimney is below the ceiling prescribed by the government.

The effluent discharged is to be treated before being channelled into the river. Other waste is are used as manure by the local people, he added.

“Following enforcement of the local self-governance act, a tax of 25 paisa had been levied on every kg of straw while a scrap tax and a local development tax have also been introduced, and this is unjustice to the mill,” said the general manager.