Manufacturing Sector In Nepal
Transformation of materials into new products is manufacturing.
The industrial sector in Nepal is dominated by manufacturing sector.
Mainly light industries, capital goods industries are very few in number.
Nepalese manufacturing sector is dominated by food industries.
Production performance of this sector is average with increase three times in last two decades.
The production performance of export oriented manufacturing industries is declining.
Paper, food, footwear, iron & steel, beverage and chemical industries are growing heavily, electrical, cement, rubber & plastic industries are growing moderately and tobacco, wood and leather industries are declining. 
Fixed capital investment is increasing heavily.
The contribution of this sector on GDP is 15.3% for the year 2070 and declining continuously. 
This sector had contributed 9.3% in 2055, 8.1% in 2060 and 8.7% in 2065 on GDP. 
The industrial sector in Nepal is suffering low productivity and there is large variance as well.
Efficiency in pharmaceutical industries is high and in metal & textile industries is low. 
Important determinants of productivity are capacity utilization and infra- structure available for the industries. 
Entrepreneur features have no significant effect in productivity. 
Liberalization has positive effect in employment in this sector. 
The trend in the employment in this sector is declining and male dominated. 
The structure of this sector is changing with grains mill in large number. 
The manufacturing establishments were increased rapidly to the year 2050 and than started to decline- 6733 in 2050 and 3213 in 2069. 
Capacity utilization of this sector is average in 50% and it is low, uneven, erratic and not changing for long period. 
The sector provides the employment opportunities for about 11% of economically active population.
Public Sector Manufacturing Enterprises In Nepal
Public sector manufacturing enterprises are the establishments with government efforts. 
This sector has played important role in the state economy and development of manufacturing sector because of the lack of private sector development, mixed economic system in the state and foreign aid. 
By the year 2047, the public sector manufacturing enterprises were 34 in number but at present it is only 9 in number. 
The decline in number is due to privatization policy of state. 
The capacity utilization in this sector is low and uneven. 
Sugar mills are using about 80% of capacity and other using less than 40% of their capacity. 
This sector is one of the important for source of employment. 
It is providing employment opportunity to approximately 9,000 people which is about 20% of total employment of public enterprises.
The performance of public sector manufacturing enterprises is very poor. 
The capital employed in this sector is more than Rs. 11,000 billion and the total loss accumulated by them is more than Rs. 800 billion- negative return on investment. 
Public sector manufacturing enterprises is being burden for state. 
The only profit earning public sector manufacturing enterprises is Dairy Development Corporation. 
Overall performance of this sector is unsatisfactory. 
With the purpose of reducing financial burden by running this sector, the government has enacted privatization policy from 2048. 
Since then, the government has privatized more than 15 public sector manufacturing enterprises and planning to privatized the other as well. 
But the pace of privatization is very slow.
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