Coke shuts Nepal operations

With the Maoist threat intensifying in Nepal, Coca-Cola has suspended its operations in the Kingdom. Coca-Cola India President Sanjiv Gupta, who is also responsible for Coca-Cola's operations in Nepal, said both bottling and distribution had been put on hold.

Gupta refused to give details of its operations in Nepal. But industry sources said the Nepalese economy was expected to lose around 50 lakh Nepalese rupees everyday in excise duties with the closure of the bottling plant.

A PepsiCo official also said the distribution in Nepal had been hit, though the bottling plant run by the Jaipuria Group, one of PepsiCo's largest franchisee bottlers in India, was still operational. A Delhi-based businessman, who has interests in the sugar business in Nepal said the situation was worrisome.

Meanwhile, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) today said the Nepalese economy was losing about 200 crore Nepalese rupees everyday on account of a dozen odd companies suspending their operations in the country.

This included Surya Nepal, a joint venture of ITC Ltd, and Dabur Nepal's plantation operations. As per FNCCI, many MNCs from other countries like Germany and UK could look at pulling out of the Kingdom.

The main impact on the economy would be the closure of Surya Nepal as it accounts for 6 per cent of the total revenue of the country, Binod Bahadur Shrestha, president of FNCCI, said.

"We are talking with the government officials and voicing the concerns of the MNCs. The prime minister is likely to come out with a stabilising measure tomorrow," Shrestha said.

The supply of readymade garments into Nepal from India has also been paralysed with the Indo-Nepal passage lines blocked due to security concerns.

Meanwhile, Nepal's capital was cut off from the rest of the country on Wednesday and the supply of food and goods disrupted as Maoist rebels enforced a blockade of the city of 1.5 million people with threats to attack vehicles.

Roads leading to Kathmandu were nearly empty, as buses, trucks and cars stayed off the highways due to the warnings.

But there were no reports of violence. The show of strength comes after 10 of the country's biggest businesses closed down following threats by the guerrillas.

The rebels have been fighting since 1996 to remove the constitutional monarchy and the war has killed more than 10,000 people. But Kathmandu has so far been spared much of the violence.

The city had about two weeks of stocks of food, cooking oil and petroleum products, a government official said. But consumer groups warned of spiralling prices as people start hoarding goods.