Biratnagar jute mills- nepal’s industrial heritage

The Biratnagar Jute Mills was where “Modern Nepal” was born. This was the first industrial complex built in the country. It was also where labor unrest allowed political parties to gain a foothold and overthrow the Rana oligarchy. The Biratnagar Jute Mills was established under Prime Minister Juddha Shamsher in 1936. This was the first registered industry in the country and is an impressive example of an industrial complex, even by today’s standards. There has however been little interest to safeguard this superb example of early industrial heritage. Vested interests, commercial profitability along with political interventions have wreaked havoc on the complex.

The area in the eastern Terai was good for growing jute and local merchants sold the jute across the border to Indian jute mills. Realizing the potential of having their own mill in Nepal they brought this idea to the attention of Prime Minister Juddha Shamsher. The Prime Minister would have been visiting the earthquake affected sites after the 8.4 magnitude Great Nepal Bihar earthquake of 1934 which had the epicenter less than a hundred kilometers away.

In the beginning, Biratnagar Jute Mills was established with 75% funding by an Indian businessman from Katihar, while the remaining 25% shares remained local of which only 8% was a government. The industries also required financial transactions to be facilitated through established institutions. This paved the way for the further industrial development of the country. There were, however, no labor laws and conditions at the work site and housing were abominable.

Nepali politicians were largely in exile in India and with independence in India, there was a fresh momentum to launch protests against the Rana regime in Nepal. Like in so many countries around the world, it was the discontented industrial laborers who supported such political opinions. The first labor strike, the Biratnagar Hartal, was launched on 4 March 1947 instigated by Girija Prasad Koirala who was working there. This allowed the eminent exiled politicians such as Bishweshwar Prasad Koirala and Manmohan Adhikari to enter the fray. The labor unrest quickly changed into a freedom movement and spread to Kathmandu.

Troops were sent in and the politicians and those involved in instigating the unrest were imprisoned. Even though all the demands of the laborers were granted the strike continued under Matrika Prasad Koirala. Further unrest followed leading to many laborers being injured and there were casualties. On 16 May 1947, Prime Minister Padma Shamsher Rana gave a historic speech agreeing to allow “commoners” into the government. It, however, took another few months and a request by Mahatma Gandhi to get the remaining politicians involved in the Biratnagar Hartal to be released from prison.

Commercial competition with the Indian side was however difficult and without subsidies for the jute industry, the mills began to deteriorate. This was of course in addition to the political interference and corruption that hardly allowed for the industry to revive. In the 1980s the mills went through several CEOs with varying success in resuscitating the industry. The political turmoil following the 1990 Jana-Andolan led to further deterioration. It was only after the 1993 elections with the UML government that new efforts were made to revive the industry with a government funding of Rs 80 million by first buying out the shares owned by Indian nationals. This increased the government’s holdings from 12 percent to 46 percent. The government was the largest shareholder and was responsible for managing the company.

However, in 1998 with a change of government, it was decided to give up the company on a management contract. Initially, it was run at a profit sharing ratio of 80:20 between government and a private party that didn’t last long. Even at 60:40 it was not profitable. This was then followed by leasing the company initially to a private competitor Arihant Multi-fibre, a subsidiary of Golchha Organisation in 2002. This again failed due to political intervention and labor problems. The government again shut down the factory after spending NRs 550 million to pay off two thousand employees. The Jute Mills was then leased by an Indian company Winsome International which ran between 2013 and 2015. Just recently the Biratnagar Jute Mills was again in the news with involved government officials personally buying government shares supposedly to revive the company. Sensing that this was the beginning of a process to sell off the company, the local community has launched a campaign to save the mills.

I was part of a team that was set-up in 1994 to renovate and reorganize the Biratnagar Jute Mills under the initiation of the UML led government. Documentation of the wonderful facilities was undertaken. There were two parallel mill buildings which were over 210 meters long, with an overall width of about 75 meters. These were beautiful metal structures with jack-arch roofs. Probably the most striking buildings would have been the diesel powerhouse with the two huge ship engines and the turbine powerhouse. These could be considered the only industrial heritage buildings in Nepal.

There were three systems that were analyzed: Land Development System, Mills System, and Housing System. At the time Biratnagar Jute Mills owned 7 plots of land totaling 68.5 bighas (115 acres). The main compound with the mills and some staff quarters covered an area of about 57 bighas (95 acres) of the total. The other plots were either for quarters such as South Colony, Hartali Hat, and Hari Nagar Bhatta. There were two plots of agricultural land in Bakri and Jatwa and a plot in Damak used for procurement. There were, of course, various land disputes going on at the time including ownership, right of use and right of way. It would, however, be interesting to study how much of this land still remains with the company.

The mills’ system was the most fascinating, which included the production as well as the necessary backup sub-systems. The production system was the core of the industry. All other systems were supporting systems that enable the production to function efficiently. The coordination and timing of the supporting systems to the production system was essential. The production system was directly involved in the processing of raw jute. The process began with the selection of jute for the correct blend. The various grades of Dossa and Sada jute were mixed according to the requirement of the end product. The jute was either processed in the sacking system of the old mill or the Hessian system of the new mill. The first part (spinning mill) consisted of bathing, preparing, spinning and winding. The second part (weaving mill) consisted of beaming, loom and finishing. The support systems included a supply of jute, gunny marketing, labor, maintenance and storage, technical systems, security, management, and marketing.

The labor colonies were however rather abysmal. The south colony, which borders directly onto India, was where the earth was excavated for the construction of the mill buildings and the godowns. The depression was filled with waste from the Jute Mill and from the nearby Sugar Mills. Across the border, gates were constructed to control the waste and when shut, this area was inundated. A further colony was Hari Nagar Bhatta, where the brick kilns were originally set up for the Jute Mill and later the area was filled up and provided to the laborers to build their huts.

The most fascinating place was, however, Hartali Hat. This was where B.P. Koirala, Man Mohan Adhikari and the organizers of the first labor movement in Nepal had stood on a platform under a tree and presented their speeches on 4 March 1947. The Rana regime snuffed out the agitation, but the movement had struck root and within a few years it led to democracy. I could however not keep out my mind what we had found on the southeastern corner of the same labor settlement. There was a depression where all the sewage from the nearby latrines collected and a child had drowned there.

I was told that this has been cleaned up. However, the government is not taking steps to safeguard the overall historic industrial complex. Instead of proclaiming this industrial complex a national heritage where modern industry began and democracy germinated, the government seems to be selling it off bit by bit with no concern for its future.

Subcribe to our Newsletter

Our main focus is to make our readers aware through our monthly issues which come up with different themes that are dedicated to different sectors, trends and events.