Phub Dem 

Three years after the withdrawal of Superior Kerosene Oil (SKO) subsidy, Druk Plaster and Chemical Limited (DPCL) that manufactures Plaster of Paris from gypsum finally shuts down.

The company issued a notification on its voluntary shutting down on January 13 this year.

After the withdrawal of the subsidy by the government in September 2015, the company decided to shut down its operation, because the factory was reported unviable.

However, the board directed the management to explore alternatives to continue operations. The company then switched to electricity as an alternative. The company recorded more than Nu 5M for the electric calcine system in 2008 which as per the chief executive officer (CEO) of DPCL, Kuenzang Leki failed miserably.

Another attempt in 2013 worth Nu 4M failed when a similar product captured the plaster market.

Considering the failures, he said that the company explored the market for gypsum powder and had been sustaining until last year.

The production of gypsum powder had some issues with the Department of Geology and Mines (DGM). The company was imposed Nu 2.2 million as export royalty and mineral rent in 2018.

Kuenzang Leki said that the gypsum powder did not qualify as ‘value-added’ products.

The company also pursued the case to Samdrup Jongkhar’s dzongkhag court with regard to the irregularities in the interpretation of rules and definition of ‘value addition’. However, the officials withdrew the case considering disadvantages to other associated companies.

Further, DGM notified the company to relocate the factory out of the gypsum mine area. With meagre financial capacity, the management requested DGM for compensation to cover the cost associated with the relocation.

DGM, however, denied paying any compensation because the factory was established as a sister concern of Druk Satair, the CEO said.

“We were asked to relocate factory so that DGM could auction Khothakpa gypsum mine, which may happen in March this year.”

According to Kuenzang Leki the company’s effort to obtain a plot at the Matanga Industrial Park was unsuccessful.

After numerous board meetings, it was resolved that the market for gypsum powder was seasonal which meant the company did not have a long term business prospect considering the cost that might involve in the relocation of the factory, besides the unreliable market for the powder.

He said that there were other manufacturers of gypsum powder.

Subsequently, the board, considering the sustainability of the company recommended processing for winding up of the company voluntarily within December last year.


The shutdown has forced the company to lay off employees. In 2017, it laid-off at least 19 employees, and 13 more employees were laid-off in December last year.

The company paid Nu 1.2M as a retirement benefit for the 13 employees. An additional Nu 712,029 was also paid as repatriation allowance to the employees.

The Company had invested Nu 4.8M in an associate company- Druk Gypproducts and Chemicals Limited (DGCL) in 2015.

While the parent company—DPCL can recover its investment from DGCL, the CEO said that the company could not recover the investment because DGCL was also considering shutting down due to unsustainable operations.

Accordingly, the company’s notification states that after the third extraordinary general meeting with the shareholders, it was agreed to voluntarily shut down. The meeting also approved the delisting of the company from the Royal Securities Exchange of Bhutan Limited.

The other two Plaster of Paris manufacturing plants, Barma Chemical Industry (BCI) and Bhutan Gypsum Private Limited (BGPL) have shut down in 2017. Most of their products were exported to India and the rest was used locally.

However, DPCL being a public company took years to process the winding-up procedure because the process required the shareholders’ acquiescence.

Distribution of subsidised kerosene to Plaster of Paris manufacturers was withdrawn in July 2016 because of the significant financial implications to the government.