RMG Sector on Verge of Folding up, says GAN

The downslide on all fronts of the country has left the Nepali garment industry in a shambles. Thanks to lack of security and proper facilities from the government, Nepali Ready made Garment (RMG) industry that used to be one of the most exportable products to the US is on the verge of extinction. "We are still getting orders but we are unable to execute these," said Garment Association of Nepal (GAN) president Prashant Kumar Pokharel.

Due to high production costs and hostile labour laws, only 12 RMG industries were surviving till recently. However, the top five of these 12 industries are shutting down one by one or running at marginal capacity.

RMG export has fallen steeply.

In July, the total export of Nepali RMG was worth $560,000 that is an increment of eight per cent compared to the same period last year, according to GAN data. In June, total export was worth $188,000 -- a fall of 80 per cent compared to last June. In May, total export was worth $571,000, a decrease by 49 per cent compared to last May.

While April saw total export worth $529,000 it still was a fall of 58 per cent compared to last April. March went the same way, seeing a fall of 31 per cent with total export worth $682,000. In February, there was a fall of 65 per cent compared to last February with total export this February worth $915,000. During January RMG export was worth $706,000 -- a drop by 73 per cent compared to last January.

"We are left with no solution to problems," said Pokharel. The top five industries surviving were J D Apparels, Momento Apparels, Ami Apparels, Surya Nepal and Cotton Comfort. Of these five, three are located in the Tarai. Due to insecurity, labour problems, strikes and bandhs, J D Apparels closed last month. Momento Apparels and Ami Apparels are operational at only 20 per cent of capacity. Cotton Comfort closed a year ago.