Why is Colgate-Palmolive Leaving Nepal?
Colgate-Palmolive India Ltd. silently suspended its Nepal operations in toothpaste production permanently but the shock in the Nepalese business community is strong. The already jittery Nepalese economy is further hit hard by the fear that the negative message this spreads can be very costly. Could this have been prevented? On scrutiny of the issue, there seem to be several other reasons behind this than just security. Established in 1997 with an investment of Rs 540 million, Colgate-Palmolive (Nepal) Pvt. Ltd (CPNPL), a wholly owned subsidiary of Colgate India, was making sound profit initially. Three packaging companies Essel Packaging (Nepal) Pvt. Ltd, Radhika Plastic Pvt. Ltd and Ace Packaging Pvt. Ltd. were ancillaries to CPNPL, making tubes, lids and cartons respectively. Nepal not being the sufficient market, 97 percent of the production was being exported to India since the inception stage. Now citing security and government policy reasons, CPNPL has permanently suspended its t
