tailieunhanh - Capacity utilization in Nepalese sugar industry

The main objectives of this study are to comprehend the capacity utilization rate of medium and large-scale sugar mills of Nepal, to analyze the reasons of under utilization of production capacity and to suggest appropriate measures to increase the capacity utilization rate. | CAPACITY UTILIZATION IN NEPALESE SUGAR INDUSTRY Sadan Kumar Bhagat ABSTRACT Under utilization of production capacity is a common issue for Nepalese manufacturing enterprises and sugar industry is no exception to this. This study mainly deals with the cause of underutilization of production capacity of Nepalese sugar mills as well as the market situation of sugar and sugarcane. In spite of sufficient production of sugarcane the sugar mills do not get adequate quantity and proper quality of sugarcane at right time. Almost half of the sugarcane production has no market which reveals the poor procurement system. The approved production capacity of Nepalese sugar mills is more than domestic requirement of sugar. However the unfulfilled demand for sugar is fulfilled mainly by imported as well as smuggled Indian sugar. The capacity utilization rate of Nepalese sugar industry which has been decreasing dropped to 45 percent in FY 2008 09. The main identified reasons are stoppage breakdown and slow motion of machines delay in settlement of minimum support price of sugarcane and late commencement of production season political instability less operation days of sugar mills and ultimately the overlook of sugar producers to utilize their full capacity of production. Measures to improve the capacity utilization rate of sugar mills have become an urgent need. INTRODUCTION Nepal is an agricultural country where majority of people live in rural areas and most of them are dependent on agriculture. Agro-based industries are prominent in Nepal. So with the establishment of various sugar mills the economic as well as social condition of sugarcane growing farmers have improved significantly. On the other hand in the case of sugar production Nepal has been moving on the path of self-sufficiency. However the domestic production of sugar has not yet been sufficient to meet the growing demand of sugar. The approved production capacity of Nepalese sugar mills is more than estimated demand .

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