industrial district management

8/12/2019 Industrial District Management

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Role of Industrial District Management in

Industrial Development

mrit KhanalBaburam Subedi

Himalaya BanMuna BaralRitu Malekoo

Suas matyaJanuary 10, 2014

Presented by:


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General Background

Industrialization process began 75 years ago when

Udyog Parishad (Industrial Council) was constitutedin 1935 and Company Act was enacted in 1937 withan aim to promote agriculture, industry andcommerce.

Nepals industrialization process got momentumfrom 1936, the year when Indian capital began toflow into Nepal to take advantages of the availablecheap raw materials and labor.

The first known industry was established wasBiratnagar Jute Mill, a collaborative venture of Indiaand Nepali entrepreneurs with initial capital of

160,000 Indian rupees


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Industrial District Management (IDM)

GON established Industrial District Management Limited asa separate corporate entity in July 1988.

It was entrusted with the overall management andsupervision of all Industrial Districts and performs tasks

such as conducting feasibility studies of Industrial Districtsin potential areas, materializing new Industrial Districts andplanning and promotion of industries therein.

IDM is wholly an undertaking of GON incorporated underthe Company Act in the form of a Public Limited Company.

Its shareholders are GON, Ministry of Industry, The Officeof Comptroller General and NIDC

It has an authorized capital of NPRs.150 million and issued

capital of NPRs.140 million.


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Contd.

Balaju is the first industrial district established

with the financial assistance of USA in 1960 A.D.

GON has established 11 IDs in different parts of

country under the assistance from various donor

countries

Out of 11 IDs, 10 IDs : Balaju, Patan, Hetauda,

Dharan, Nepalgunj, Pokhara, Butwal, Bhaktapur,

Birendranagar and GajendranarayanSingh(Rajbiraj) are in operation and one at

Dhankuta, is in Work In Progress.


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Organization Structure

Industrial District Management Limited

Board Of Directors

General Manager

Administration &

Finance

Operation

Division

Planning &

Development

Company

Secretarial

Finance HRM

Internal Audit


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Objectives of IDM

To provide infrastructure facilities to industries in Industrial District

To study potentiality for establishment of Industrials District andpromote new Industrials District in feasible areas.

To stimulate private sector in setting up Industrials District in

promising area and extend technical and other services if required.

To promote industries in the Industrials District and undertake theoverall management and supervision of the Industrials District

To identify problems of industrial units set up in the Industrials

District and provide management consultancy and extension

services for their smooth operation and productivity improvement To disseminate information on feasible projects, facilities available

in the IDs and opportunities therein for investment.

To study the implication of government policies and make

recommendations to Government


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Statement of the problem What is the role of Industrial District Management Company in

Industry development of Nepal? What could be the possible causes for the poor functioning of

IDM?

Why many industries are closed in different industrials district?

What is the problem behind this? Why government investment is too low as compared to private

investment?

How would you encourage and facilitate new manufacturing

industries? What are the current problems for IDM?

How can you increase your role in industrial development of

Nepal?


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Objective of Study

The study mainly focuses on exploratoryanalysis of role of IDM in industrial

development of Nepal.

The study mainly tries to find out the

working and functions of IDM.

The present and future prospective of

analysis is also found out. Likewise the

problems and necessary recommendations

are also performed.


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Significance of Study

The study would be significant to

students, researchers, academicians

and business people for the generalunderstanding of industrialization in

Nepal and IDM roles in its

promotion.


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Organization of study

The study has been divided to 4 parts. The chapter 1 deals with the introduction, objective,

significance o study.

The chapter 2 deals with research methodology and

deals with various tools used to conduct the study. The chapter 3 deals with presentation and data

analysis. It specifies the current and future positionof IDM and problems faced by IDM in performing itsrole.

The chapter 4 deals with the summary andconclusion section.


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Research Methodology

Research Design

This research is based upon theoretical analysis and usesonly simple graphical and tabulation methods.

Data Collection Procedure

Primary SourcesThe data were collected through face to face interview

methods with the employees of IDM.

Secondary Sources

Secondary sources of datas were also collected from

website of IDM. Meanwhile, several journals, articles

and newspaper were also referred regarding the working

of IDM.


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DATA PRESENTATION AND

ANALYSIS !!!


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Facilities provided by IDM

Low cost initial investment Land

Warehouse

Basic physical infrastructuresRDCWF Supporting facilities - Bank, Post Office,

Clinic.

One window services - Approval of layout

plan/ design/ construction work proposed

by industrial units or reduce Admin cost.


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Industrial

DistrictDeveloped Leased

Not

Leased

Service

sectorUndeveloped

Total

Area

Balaju 670 540 0 130 0 670

Patan 293 220 0 73 0 293

Hetauda 2506 1904 0 602 323 2506

Dharan 202 134 6 62 0 202Nepalgunj 233 189 0 44 0 233

Pokhara 501 397 0 104 0 501

Butwol 406 348 0 58 28 406

Bhaktapur 71 58 0 13 0 71Birendranagar 90 66 0 24 0 90

Dhankuta 0 0 0 0 63 0

G.N.Singh 171 17 13 141 123 171

Total Area 5680 19 537 5143

Area Utilization


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0

10

20

30

40

50

60

70

80

90

100

Area

in

Percentage

Industrial District

Area Utilization

Developed

Leased

Service sector

Undeveloped

Not Leased


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Industrial DistrictGovernment Investment Private Investment

Total

Ropani % Ropani %Balaju 62.2 2 3120 98 3182.2

Patan 40.1 2 1700 98 1740.1

Hetauda 53.3 1 5020 99 5073.3

Dharan 13 4 300 96 313

Nepalgunj 17.5 1 1952 99 1969.5

Pokhara 28.2 2 1830 98 1858.2

Butwol 23 1 2701 99 2724

Bhaktapur 22.4 4 590 96 612.4

Birendranagar 15.4 51 15 49 30.4

Dhankuta 5.6 100 0 0 5.6

G.N.Singh 48.6 58 35 42 83.6

Total 329.3 17263

Investment Portfolio


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0

10

20

30

40

50

60

70

80

90

100

2 2 1 4 1 2 1 4

51

100

58

98 98 99

96

99 98 99

96

49

0

42Percen

tage

Industrial District

Investment Portfolio

Government

Investment

Private

Investment


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Industrial DistrictsNo. of

industries

Running Under construction Closed

No. % No. % No. %

Balaju 131 97 74 26 20 8 6

Patan 112 102 91 5 4 5 4

Hetauda 100 63 63 17 17 14 14

Dharan 34 24 71 9 26 1 3

Nepalgunj 35 30 86 4 11 1 3

Pokhara 76 61 80 5 7 10 13

Butwol 71 62 87 2 3 7 10Bhaktapur 37 35 95 0 0 2 5

Birendranagar 28 22 79 6 21 0 0

Dhankuta 0 0 0 0 0 0 0

G.N.Singh 4 2 50 1 25 1 25

Situation of Industries


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0

10

20

30

40

50

60

70

80

90

100

74

91

63

71

86

80

87

95

79

0

50

I

nPercentage

Industrial Districts

Industry Situations

Running

Under

Construction

Closed


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Company Future Plan

Expanding the Hetauda Industrial

Districts - Occupied by Hetauda

Textile

New IDs/IEs, IDM has conducted

feasibility study and preliminarysurveys has finished and they are in

pipeline

/


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Proposed IDs/IEsDistrict Location Remark

Nuwakot Battar Feasible

Janakpur Dhalkebar Feasible

Sankhuwasabha Jaisi Gaon Conditionally Feasible

Illam Golakharka/Godak Conditionally Feasible

Chitwan Bharatpur Feasible

Kanchanpur Mahendranagar / Dhaiji Feasible

Lamjung Sundar Bazar/Benisahar Feasible

Kavrepalanchowk Subba VDC Feasible

Jhapa Charali Feasible

Mahottari Jaleshwor Feasible

Dang Lamahi(Kulmod) Feasible

Tanahu Groiund Naya Basti Feasible

Kailali Dhangadi (geta) Feasible

Butwol Ramnagar(Near Butwol ID) Feasible


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A CriticalAnalysisof IDMNepal

withIDCSouth Africa


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What they Do!!!

IDC provides finance for industrial

development projects, playing a

catalytic role in promotingpartnerships across industries

within and outside our borders,promoting regional economic

growth


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How they Do!!!

By proactively identifying and fundingof

high-impactand labor-intensive projects.

By leading the creation of viable newindustries;

By using their diverse industry expertise

to drive growth in priority sectors; and

By taking up higher-risk funding projects.


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IDC in Sustainable Environment

Protection

Encouraging compliance by all their

applicants;

Managing the impacts of all projects Promoting the responsible use of all

resources; and Encouraging the use of

environmentally-friendly products.


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Development Funds for Industrial

Development

IDC provides support to projects

that have a high developmental

impact and will, over time, grow

the economy.

Emphasizes growth, employment

creation and equity generation.


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IDC hands-on approach for

Industrial Development They provide expertise and

knowledgeto each project. Monitor the progress of the

Project

Gather regular reports from ourinvestees.


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How their Support help the

Economy! Job creation;

Developing small and medium enterprises;

Developing rural areas and underdevelopedprovinces and regions; and

Boosting Broad-based Black Economic

Empowerment and empowering people who were

previously excluded from participating in the

economy.


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What we Experience!!!

These all Lacks In IDM

We donthave prioritize our industries

We do not Enhance ManufacturingCompetitiveness

We do not Provide funds for projectdevelopment, planning, & Expansion

We do not provide Expertise Service


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Our Proposed Model !!!


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Manufacturing

Industries

Energy-Based

Industries

Agro and

forest-Based

Industries

Mineral

Industries

Tourism

Industries

Ser vice

Industries

Construction

Industries


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How it Work?

Need Sufficient Budget for Smooth Operation

Work as Integrated Body

Why we need NIB?? Why We need SEZ, rather they should be part

of IDM or IDC??

Same type and Same Nature organization shouldmerged on IDM

It must be autonomous Body of Ministry of

Industry


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Result

Industrial Innovation

Increased Employment

Increased Economic Activity

Increased National Production

Increased in GDP

Increased NI

Increased Income Level

Improve Living Standard

Finally National Prosperity


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Summary The establishment of industrial council in 1935 and

promulgation of the Company Act 1937 was the firstmilestone for industrialization growth in Nepal.

Furthermore, as time passed government of Nepal felt a

strong emphasis to the development of industry for the

economic development of Nepal. Thus Industrial District

Management Limited was established in July 1988.

It was entrusted with the overall management and

supervision of all Industrial Districts plus other tasks suchas conducting feasibility studies of Industrial Districts in

potential areas, materializing new Industrial Districts and

planning and promotion of industries therein.


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Contd.

The IDM has now developed 10 such districts and

proposed to develop about 14 such districts invarious parts of the country.

Meanwhile, the fact however still remains that

government of Nepal has been only playing anassistance role and not fully being involved in the

set up of government industry.

In most of the district the investment ofgovernment to private sector was 20% to 80%.

M j Fi di


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Major Finding:

Poor infrastructure within industrial district or

industrial state. Lack of micro management in industrial estates

such as Road, Drainage, Culvert, Electricity, Water

supply, Water filtration. No any systematic arrangement of industrial site

and location like no proper care given for

Occupational Health and Safety when establishing

the new industry.

Limited operation area. IDM does not concern

with the industries outside the industrial district


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Contd

Lack of sufficient budget for smooth operationand functioning. The revenue source of IDM isonly rent and lease from land and building that is

comparatively lower than existing market rates. No proactive planning and no new research of

industrial districts on timely basis for promotingindustrial innovation.

No proper coordination between differentministry and department of Govt.


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Conclusion The study emphasis towards role of IDM in Industrial

Development of Nepal. The industrialization started by the Panchayat

Government was followed and developed by theMulti party democracy party after 2046 peoples

revolution and same continued throughout theMaoist insurgency periods and till now,

The research concludes that although much has beenchanged and developed in other developing nation.

It is still not so worthy from Nepalese perspective. The strong private sector and weak government and

IDM have profited the private sector. However, thecondition of IDM that helped to promote and growindustrialization is not degrading day by day.


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Recommendation

It is suggested to search new source of revenue for IDM operation

and management It is advised for micro management of industrial districts like Road,

Drainage, Culvert, Electricity, Water supply, Water filtration

services.

Establishment of proper system for establishing new industrywithin industrial district

It is suggested on proper maintenance of existing infrastructure of

IDM.

Reduction of centralized power and authority to different regionaloffice of IDM should be done.

Identification of the national priority sectors for industrial

development should be performed.

d


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Contd.

It is advised to bring special schemes to increase the

competitiveness of manufacturing of manufacturingindustries.

Hiring of professional manpower for proper functioning

of IDM is vital for proper functioning of IDM. International co-operation for technological know-how

and new innovation in industrial development of Nepal

should be performed to be globally competitive

The electing of different member in BOD of IDM in fromBusiness community and employee community and

should be based on transparent and uniform manner to

implement timely and concrete decisions.


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Speaking Picture


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Speaking Picture


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Speaking Picture

Sh t Gli


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Short Glimpse


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industrial district management

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