Maoists in power means reprieve for Vijay Mallya in Nepal
The Indian industrialist's firm will reopen after remaining closed for 5 months.Updated: Apr 05, 2007, 15:16 IST
Maoists joining the Nepal government has meant a reprieve for Indian liquor baron Vijay Mallya's Nepal venture United Breweries that is readying to reopen after remaining closed for nearly five months.
United Breweries Nepal (UBN), the makers of Kingfisher and Gold Star beer with a market share of over 40 percent, is expected to reopen its factory in Hetauda in central Nepal Friday after being forced to close down in November.
UBN officials said they were compelled to close the factory after threats from the Maoists for resisting their demand for "donations".
Though the communists had signed a peace pact with the then seven-party government and agreed not to extort or intimidate business houses, they still asked UBN for an astronomically large sum of money, officials said.
"There were earlier demands for money too," an official said on the condition of anonymity. "But the last demand was for a huge sum of money."
With the Maoists' powerful trade union flexing its muscles in Nepal's industrial sector and the government remaining a silent spectator, the company closed the factory in November, the peak time for the consumption of beer.
The five-month loss has cost the company millions.
The Hetauda factory manufactures 2,500 cases of beer per day, each case containing 12 bottles.
As part of the new image makeover, local Maoist leaders in Hetauda have reached an undisclosed agreement with UBN, which was established in Nepal 41 years ago.
Even if the factory reopens on Friday, it will be another 10-15 days before it starts production in full swing.
UBN had earlier hit the headlines when a local daily reported that during the last week of King Gyanendra's regime, senior government officials had signed an approval allowing the company to collect a customs refund.
With the guerrillas joining parliament in January and the new interim government finally being formed on April 1, there is new pressure on the formerly banned party to refurbish its image.
Last month, the Maoists' image took a bad toss after an hotelier complained of being abducted and badly beaten up by them and businessmen called an indefinite strike, asking the government for security.
Finally, the rebels gave a signed undertaking that such events would not recur, after which the strike was lifted.
The political instability and continuing violence in Nepal has caused another Indian venture, Aarti Strips, to decide to pull out of Nepal. Colgate-Palmolive is also looking to relocate its factory outside Nepal.