Suyesh Pyakurel serves as the Managing Director of the MM Group of Companies. He is a seasoned business leader based in Biratnagar, the industrial heart of eastern Nepal where the country’s modern industrialisation first took root. Biratnagar’s legacy dates back to 1936 with the establishment of the Biratnagar Jute Mill, Nepal’s first large-scale modern industry. This later paved the way for the development of the Sunsari-Morang Industrial Corridor as a primary industrial hub.
The MM Group of Companies operates significant industrial units within this corridor and maintains its headquarters in Biratnagar. With a legacy spanning over four decades, the group has successfully diversified into manufacturing, trading, and agricultural sectors. Most notably, the MM Group has established itself as a leading supplier of intermediate packaging goods to various multinational corporations and major domestic firms.
As Managing Director, Pyakurel is responsible for the overall planning and execution of expansion strategies while overseeing the Group’s management. Beyond his corporate role, he served as the President of the Chamber of Industries Morang from 2021 to 2023. Currently, he advises the Government of Nepal on industry and trade matters as a member of the Industrial and Trade Promotion Council, a position he has held since February 2025. In a conversation with the HRM Nepal, Pyakurel shared key insights on the challenges facing the industrial sector and the necessary path forward. Excerpts of the interview follow.
Q: Nepal’s economy continues to face structural constraints, particularly due to a weak production base. As a seasoned industrialist, what key gaps have you identified that must be addressed to strengthen domestic manufacturing?
A: Nepal’s biggest structural weakness is its narrow production base and high dependence on imports. We lack scale, technology depth, industrial clusters and infrastructure. If we see the composition of the economy, Nepal is basically a service sector led economy, and the contribution of the agriculture sector has been almost constant for the last several years. While analysing the 2025 data, the contribution of the services, agriculture and industrial sectors in the economy stands at 66.5%, 22.2% and 11.3%, respectively. Manufacturing accounts for a mere 4.4% of the total, representing a marginal decline compared to approximately 5% in 2021.
Additionally, policy instability and high cost of capital discourage long-term manufacturing investments. To strengthen domestic manufacturing, we must focus on stable policies, industrial infrastructure, affordable energy, and technology upgradation. The structural challenges of the economy must be identified and addressed through an action matrix to overcome the constraints hindering the expansion of the industrial sector. Unless the industrial sector becomes robust, economic vulnerabilities will persist. We should not undermine the role of the industrial sector in substituting imports and boosting exports by enhancing production competitiveness, creating jobs, and moving toward a stable growth trajectory.
With the formation of a new government following the election, we expect positive changes in creating an enabling and predictable investment environment.
Q: Despite significant investments, many industries are operating below capacity, as highlighted in assessments by Nepal Rastra Bank. What strategies do you believe are essential for improving capacity utilisation and operational efficiency?
A: Underutilisation is largely due to weak domestic demand, inconsistent supply chains and limited export competitiveness. Aggregate demand in the economy has been slumping alarmingly in the post-Covid 19 pandemic era. The consistent economic slowdown acts as an adversary to the capacity utilisation of most industries. Those operating at low capacity may not remain sustainable for long, as they struggle to even cover their basic operating costs. The current situation of a demand shock in the economy could lead to further significant risks. To cope with these challenges, we must ensure competitive financing, reliable power supply, reduced logistics costs, and address policy inconsistency. Industries require a predictable operating environment to function at an optimal capacity.
Q: What opportunities do you see for Nepali industries to integrate into regional value chains, particularly with neighbouring economies such as India and China?
A: Nepal is strategically located between India and China, and in close proximity to Bangladesh. We should leverage trade agreements and focus on niche manufacturing, agro-processing, herbal products, light engineering goods, fast-moving consumer goods (FMCG), and hydropower-based industries. By improving standards, certification, and logistic connectivity, Nepali industries can plug into regional supply chains rather than competing head-on with large economies. Integration with the global production giants of China and India offers numerous opportunities for the production of intermediary goods or the supply of processed and semi-processed raw materials. Based on our niche advantages, Nepal can effectively explore such opportunities.
To capitalise on the benefits of the rising economies in our neighbourhood, Nepal must frame and execute conducive policies and attract investment, even in areas of vertical specialisation. As Nepal will soon have sufficient clean energy generation, we should consider attracting investment into energy-intensive industries. These would not only consume surplus electricity but also create multiplier benefits for the broader economy. As Nepal previously witnessed premature deindustrialisation due to the erosion of trade preferences, a decade-long insurgency, and rolling blackouts, integration into the regional value chain could provide an opportunity to enter a new phase of industrialisation powered by cutting-edge technologies.
Q: There is a perception that policy emphasis remains heavily revenue-driven rather than incentive-based. How should taxation and import policies on raw materials, machinery, and technology be recalibrated to promote industrial growth?
A: Our taxation system must shift from revenue-centric to growth-centric. The focus should be on production and growth. Once we have production, consumption, and exports, they will naturally generate increased revenue. Taxing the purchase of machinery, intermediary goods, and technology simply demotivates investors. Occasionally, tariffs on intermediate goods and raw materials are higher than those on finished products or are only marginally lower. This fails to incentivise investment in the industrial sector. Numerous contradictions in tax policies ultimately constrain industrial development within the country.
Incentivising capital investment and automation through tax rebates would strengthen industrial competitiveness. The objective should be to encourage production rather than penalise it. Policy makers must introspect whether current tax policies are truly providing an enabling environment for the country’s industrial sector.
Q: How do you assess the current investment climate for industrial expansion in Nepal, particularly in terms of infrastructure, financing, and regulatory predictability?
A: While Nepal offers significant potential, persistent challenges remain regarding infrastructure gaps, bureaucratic delays, and regulatory unpredictability. The country’s cumbersome bureaucracy has created substantial procedural delays, and it is vital for authorities to acknowledge that these delays translate directly into costs for investors, ultimately undermining investment efficiency.
In terms of infrastructure, a yawning gap exists in both the physical and digital sectors. Robust infrastructure is essential for lowering the costs of production and trade. To improve confidence, investors require long-term clarity, which can be fostered through the development of industrial corridors, enhanced road connectivity, reliable power supply, and faster approval mechanisms.
Q: To what extent can import substitution and export diversification realistically drive Nepal’s industrial transformation?
A: Over the last decade and a half, an alarmingly high trade deficit has consistently pressured the Balance of Payments. While the current situation remains relatively stable due to the influx of remittances, this cannot be considered a sustainable source of foreign exchange earnings. In the medium term, Nepal must diversify its foreign exchange revenue by boosting exports, strengthening the tourism sector, and exploring other potential avenues.
We require a reliable import substitution strategy alongside the maximisation of exports for products and services with niche market advantages. Import substitution is realistic in sectors such as cement, steel, agro-products, and selected FMCGs. However, long-term transformation depends on export diversification. We must transition from low-value exports toward processed and branded products.
Q: What role should technology adoption, automation, and digitalisation play in improving productivity and competitiveness of domestic industries?
A: Technology is no longer optional. Modern industries must leverage digitalisation to maximise output while minimising operational expenses. When inputs are efficient and cost-effective, production becomes truly competitive. Automation, Enterprise Resource Planning (ERP) systems, data-driven inventory management, and digital sales channels significantly enhance productivity and reduce waste. Ultimately, industries that fail to modernise will struggle to remain viable in both regional and global markets.
Q: What reforms are necessary to improve industrial credit flows and reduce the cost of capital and provide 24/7 cheaper electricity to industries?
A: Industrial growth necessitates long-term financing at competitive interest rates. Following global examples, many governments provide various subsidies, including interest rate incentives, to bolster industrial competitiveness, particularly for export-centric sectors. Such policies are instrumental in securing a dominant market share both regionally and globally. Additionally, industries require reliable, affordable 24/7 electricity to lower production costs, therefore, energy pricing should actively support expansion.
Our existing tariff structure is largely counterintuitive. For instance, costs increase for those consuming more electricity. Instead, tariffs should decrease once a certain threshold is met to encourage higher power consumption. Currently, industries nationwide face power shortages of 6 to 8 hours daily during the dry season. This situation is expected to resolve in several years as hydropower projects currently under construction begin generating power. In this context, the tariff structure must be revised. For example, since household consumption drops significantly at night and electricity is wasted, this energy could be provided to industries at nominal rates during off-peak hours. This would allow industries to operate an additional shift and optimise their production capacity.
Q: How do energy reliability, logistics bottlenecks, and cross-border trade facilitation affect industrial competitiveness, and what solutions do you recommend?
A: Unreliable power supply, high transportation costs due to delays in constructing the east-west lifeline highway, and customs bottlenecks directly undermine competitiveness. Modernising dry ports, accelerating customs clearance, implementing digital documentation, and upgrading cross-border infrastructure are crucial. While Nepal has made some progress in modernising trade infrastructure like dry ports, priorities must shift toward connecting major dry ports via rail, developing and efficiently operating integrated check posts, and establishing dirty cargo handling facilities besides upgrading lifeline highways and economic corridors. Furthermore, high logistics costs in transit must be reduced for third-country trade. Similarly, logistics costs in bilateral trade can be minimised through proper infrastructure, the efficient operation of trade facilities, and the timely clearance of goods at customs points.
Q: Having served in leadership and advisory roles, including President of the Chamber of Industries Morang and member of national trade promotion platforms, what policy interventions and initiatives have you advocated for strengthening Nepal’s industrial ecosystem?
A: During my tenure at the Chamber of Industries Morang, I consistently advocated for industrial-friendly taxation, power tariff rationalisation, infrastructure development in industrial corridors, and simplified export procedures. Industrial growth requires collaborative dialogue between the private sector and policymakers to create a supportive environment for private enterprises. In Nepal, tax policies often take precedence over industrial policies. Provisions within the Industrial Enterprises Act or the Special Economic Zone Act are frequently overridden by the Financial Bill, which is an integral part of the annual budget. Policy inconsistency and regulatory unpredictability continue to hinder industrial growth, issues I have consistently raised from various public positions and as an industrialist.
Q: How has MM Group evolved and diversified across manufacturing, trading, and service verticals over the past four decades?
A: Over four decades, MM Group has diversified across the manufacturing, trading, and agricultural sectors. We have focused on gradual expansion, strategic reinvestment, operational efficiency, and risk diversification while maintaining rigorous governance standards. Today, MM Group is a leading supplier of intermediate packaging goods to multinationals and major firms such as Bottlers Nepal Ltd., Unilever Ltd., Dabur Nepal, CG Reliance, and many others. Based on this experience, I would like to reiterate that domestic ancillaries can flourish if the government creates a conducive environment for multinationals and large manufacturing giants to invest in Nepal.
Q: What defines the unique selling proposition of your manufacturing segment, and what operational or market innovations are you introducing across production, supply chains, and sales?
A: Our primary unique selling proposition centres on consistent quality, supply chain reliability, and cost efficiency. To enhance our market reach, we are investing in automation, advanced procurement systems, and more robust distributor networks.
Q: How is MM Group addressing workforce skill gaps and aligning human capital with evolving industrial requirements?
A: The skill gap remains a primary challenge within the industrial workforce. We prioritise internal training, technical workshops, and management development programmes, as aligning human capital with modern industrial requirements is essential for competitiveness. Furthermore, government-run training centres, vocational skill providers, and universities must collaborate to align skill development and workforce reskilling with evolving industrial needs.
Q: What opportunities do you foresee for partnerships between large industrial houses and SMEs to deepen supply-chain linkages within Nepal?
A: Robust backward and forward linkages with SMEs will deepen domestic supply chains, providing opportunities for SMEs to grow while attracting new entrepreneurs and expanding ancillary enterprises within those networks. Vendor development programmes, subcontracting, and technical mentoring can further strengthen Nepal’s industrial ecosystem.
Q: Looking ahead, which sectors hold the greatest promise for industrial growth, and what strategic direction is MM Group pursuing to capitalise on emerging opportunities?
A: Sectors with high potential as identified by the MM Group include agro-processing, renewable energy, construction materials, FMCG manufacturing, and export-oriented niche products. MM Group’s strategic direction focuses on technology-driven expansion, operational efficiency, and regional market integration.
