BUSINESS & ECONOMY

Garment continues to be top export item

-By A Staff Reporter

Readymade garments have continued to top the list as the biggest foreign currency earner by registering 89.7 percent increase in its exports in the first two months of the present fiscal year, as compared to the figures in the same period last year.

Only during the last fiscal year readymade garments replaced woolen carpets from the top position in the list of the biggest foreign currency earner of the country. The high demand of Nepalese readymade garments in the USA has helped export of garments to go up.

Rising higher : Readymade garments have gone on to become the highest foreign currency earner.

Beside that, a decrease in exports of woolen carpets has eased its way to reach the top. Ever since the case of child workers and harmful dyes used to wash the carpets were associated with the production of woolen carpets, export of this commodity dropped.

However, with the start of the new fiscal year, the export of woolen carpets has also registered considerable growth. But, the rate of growth of woolen carpet export is still not high enough to regain its top position in the list of biggest foreign currency earner. According to a recent press release issued by Nepal Rastra Bank, in the past two months, export of woolen carpets increased only by 18.4 percent.

Woolen carpets and readymade garments are exported to the United States of America under the general system of preference (GSP) agreement. According to which, the USA has provided certain quotas for Nepal to export readymade garments items to their country.

Nepal Lever records growth

-By A Staff Reporter

Nepal Lever Ltd. has recorded a growth of 26% in the financial year which ended 32 Ashad 2056 to reach a turnover of Rs. 150.37 crores, of which exports contribute to Rs. 105 crores also having grown at the same rate. While pre-tax profit has risen in line with the turnover increase, the net profit has grown at a marginally lower rate to Rs. 11.90 crores (previous year Rs. 9/97 crores) due to the incidence of corporate tax in the domestic business following the end of ‘tax-holiday’. The board of directors at their recent meeting in Mumbai, India recommended a dividend of Rs. 40/- per share, doubling the payout over last year.

Nepal Lever today accounts for nearly 10% of Nepal’s manufactured exports to India and the exports performance has been maintained despite difficult trading conditions abroad and intense low cost competition from South East Asian countries.

After a sluggish start in the first half (due to a stagnant economy and trade disruption), the domestic business recorded a superlative performance in the second-half of the year with an underlying volume growth in excess of 40% over corresponding period of the previous year. Introduction of OK laundry soap, in the value conscious segment of the market was a key addtiion to the portfolio. Offering consumers a superior performance at a lower cost per wash, OK has in less than a year of its launch captured a significant share of the market. Older brands were rejuvenated with innovative market activities. Wheel detergent powder, Liril and Close-up continued to maintain market leadership in their respective categories.

During the year, the company made significant strides in increasing the width and penetration of its distribution network. The number of re-distribution stockists increased to over 50, servicing close to 15000 retail outlets directly, throughout the length and breadth of the country reaching even the remotest regions.

The commissioning of National Soaps Ltd., a ancillary unit for manufacturing OK laundry soap under the technical supervision of NLL, both for domestic market and exports, was a major landmark. It is a testimony of Nepal Lever’s commitment to contributing to the economic development and employment generation in the country through partnership with local industry. The unit of National Soaps Ltd., employing around 50 workmen, has in its very first year of operations produced over 3000 tonnes of laundry soaps and already commenced exports of its products.

On the financial front, NLL has become a “zero-debt” company. Earnings per share have increased to Rs. 129/- and reserves have doubled, while maintaning RONW at a healthy 47%.

“I believe that like the rest of South Asia, Nepal is poised for rapid economic growth in the next millennium. Though small in size, Nepal has huge untapped human and natural resources, which if properly exploited, will make Nepal develop into a strong economic entity”. Chairman K.B. Dadiseth remarked. “Nepal Lever would like to participate in this growth opportunity by introducing consumer relevant innovations - in products, technology and distribution systems. In doing so, NLL would actively collaborate with local industry and develop ancillaries wherever appropriate” - he added.