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🇳🇵 Nepal /Economy & Trade

Nepal's Udayapur Cement factory faces bankruptcy as workers go unpaid

From Kathmandu Post · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Hundreds of workers at Nepal's state-owned Udayapur Cement factory have not received salaries for up to 17 months, facing severe financial hardship and inability to afford basic necessities.
  • The factory is on the verge of bankruptcy with liabilities exceeding $5 billion, burdened by aging machinery, political interference, and a lack of working capital that has halted production.
  • Once a symbol of Nepal's industrial pride, the factory, established in 1987, is now struggling for survival due to a persistent cycle of financial crisis and mismanagement.

Shankar Thapa, a worker at the Udayapur Cement factory in eastern Nepal, has gone 17 months without a salary. "It has become extremely difficult to run the household without a pay," Thapa told Kantipur. His children's education suffers, and he has resorted to loans for daily expenses. "We have survived on loans for all these months," he said. "Now we are struggling even to put food on the table."

It has become extremely difficult to run the household without a pay.

— Shankar ThapaA worker at Udayapur Cement describing his financial hardship due to unpaid salaries.

Thapa's situation reflects the plight of hundreds of employees at the state-owned factory, which is nearing bankruptcy. Mounting liabilities, outdated machinery, and years of political interference have crippled operations. According to Chakra Karki, secretary of the employees' struggle committee, some workers have died without access to medical treatment due to their inability to afford it. Karki stated that 10 workers died while awaiting salaries, and many others are deeply in debt.

The factory, which has an approved staff of 580 but only 173 currently employed, also owes retired employees benefits. Liabilities to current employees alone exceed 1 billion Nepalese rupees ($7.5 million), including unpaid provident fund and insurance contributions. Despite possessing high-quality limestone and an established brand, Udayapur Cement faces total liabilities surpassing 5 billion Nepalese rupees ($37.5 million).

We have survived on loans for all these months. Now we are struggling even to put food on the table.

— Shankar ThapaA worker at Udayapur Cement detailing the impact of not receiving wages.

Production has been halted since February due to a lack of working capital. The factory, established in 1987 with Japanese assistance and beginning production in 1992, is trapped in a cycle of financial crisis, managerial instability, outdated technology, political interference, and labor issues. Once a source of national pride, Udayapur Cement now fights for survival.

10 workers died while waiting for their salaries, while most of those still waiting for their pay have fallen deep into debt.

— Chakra KarkiSecretary of the struggle committee at Udayapur Cement, highlighting the severe consequences for employees.
DistantNews Editorial

Originally published by Kathmandu Post in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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