Neten Dorji

Samdrupjongkhar—Imagine a house constructed using locally produced cement, sand, bricks, steel, and nails instead of imported construction materials in the town. This could become a reality as momentum grows to promote local goods, substitute imports, and enhance local market opportunities.

However, the use of locally manufactured construction materials in the country remains limited, with a significant reliance on imports for almost every material. Some government agencies opt to procure materials from abroad, often citing lower prices, which has left local manufacturers in industrial parks uncertain about their future.

Manufacturers point out that the main issue lies in the lack of confidence among Bhutanese consumers in local products, particularly construction materials, even though these products are certified by the Bhutan Standards Bureau (BSB).

Most of the local manufacturing units remain idle due to a lack of market

Interestingly, people are observed importing the same construction materials produced by Bhutanese manufacturers from dealers across the border.

Nidup Dorji, from a concrete brick manufacturing unit in Montanga Industrial Park, Samdrupjongkhar, highlighted that a major challenge for manufacturers is the public’s lack of awareness about local products.

He said that inadequate monitoring and enforcement of regulations also contribute to the ease of importing construction materials.

He expressed frustration, stating, “Without giving us a chance to demonstrate our product’s quality, it’s unfair to judge based on assumptions. We maintain high standards as certified by the BSB and cannot compromise on quality.”

He explained that most people import bricks without considering the quality.

Many Bhutanese are hesitant to purchase locally produced wire nails due to perceived higher costs. Ironically, these same nails are purchased at a higher price when exported to Assam.

Phuntsho Tenzin, owner of Thongleg Wire Industries, clarified that while the same wire nail costs Nu 70 per kilogram domestically, consumers end up paying between Nu 77 to Nu 89.60 per kilogram when factoring in GST and a 10 percent sales tax when purchased from Assam.

“There is an assumption among the Bhutanese that Indian products are of better quality and come at a cheaper rate, which is not true,” he said. “They do not even come and consult with us about the prices.”

The local construction materials are comparatively cheaper than the imported items. They explain that the cost of production within the country is far lesser, mainly because no GST is levied on the import of raw materials and from the tax holiday the government provides to local manufacturers.

The other reason why Bhutanese do not opt for local products is because of the perceived poor quality.

Another manufacturer who requested anonymity said that the bottleneck in producing edible oil is the public opting for cheaper rates and consuming unhealthy imported oils.

“Most consumers opt for cheaper pricing and do not consider the value and quality of edible oil or locally manufactured products,”he said.“Moreover, the public is not aware that imported oils are unhealthy to consume.”

To implement the buyback policy, it is suggested that the Food Corporation of Bhutan (FCB), as the main distributor in the country, should lead by example by purchasing locally produced edible oil.

“FCB, being a major supplier to schools,institutes and government agencies, can provide chemical-free products, as some imported oils are not recommended for consumption.”

It is known that until the government intervenes with policies to control the importation of unhealthy edible oils, local producers cannot compete in a market flooded with imported oils.

Local manufacturers say that the Bhutan Standards Bureau (BSB) certifies all locally produced construction materials and the Bhutan Food and Drug Authority(BFDA).  “If the quality of the products is inferior, they would not be in the market. If two products are compared—imported and locally manufactured—the local products would be better,” said another manufacturer.

It was learned that despite all the advantages local manufacturers enjoy in the form of land lease and tax holidays, the lack of awareness among the public and limited market nullifies all these investments made by the government in the cottage and small industry (CSI) sector.

“We are too reliant on imports because they come at a cheaper rate. It is our sincere effort to change the age-old belief that only imported goods are of better quality and cheaper,” said a local manufacturer from Nganglam. “But, these efforts have not materialised or convinced our own people.”

The support

Local manufacturers claimed that while the government has been supporting promoters, CSI and private sector growth, they required marketing support after productions.

A manufacturer in Phuentsholing said that like the rest of the local manufacturers, his company is competing with Indian giants in the construction sector.

“Only possible way to promote local manufacturers is the government prioritising local materials in the tender documents and the bill of quantities (BoQ),” he said. “Most of the time, BoQs is procuring agencies that directly reflect the Indian brands to be used in any project.”

One common feedback is the desire for government support to implement policies that promote the use of local materials.

“There have been several executive orders from the government to use locally produced materials, but these orders have remained only on paper as public authorities themselves are reluctant to abide by them,” said a manufacturer.

Most manufacturers suggest that if all government offices could procure local products, even if they are costlier than similar foreign goods, it would benefit all local manufacturers. “Provided that local products are not available in adequate quantities, they could consider at least 50 percent of the local products during the procurement process,”said one.

 

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