Government forms task force to study reopening of Birgunj Sugar Mill after 27 years

Birgunj, August 18, 2026 — The government has formed a task force to examine the possibility of reopening the Birgunj Sugar Mill, which has remained shut for nearly 27 years.

The task force has been formed under the coordination of Shrikant Yadav, chief divisional engineer at the Ministry of Industry, Commerce and Supplies.

The formation follows a Cabinet decision directing the government to assess the condition of the defunct factory and examine previous decisions, studies and reports concerning its potential revival. The task force will also recommend the measures that would need to be taken to move the process forward.

Section officers from the Ministry of Industry, Commerce and Supplies and a representative from the Department of Industry are members of the task force.

The ministry has given the task force 15 days to complete its assessment and submit a report.

As part of the study, the team will inspect the condition of the factory’s buildings, industrial infrastructure, machinery and spare parts. It will also assess whether the existing facilities and equipment can be reused if the factory is brought back into operation.

The Birgunj Sugar Mill was established with assistance from the former Soviet Union. Then-King Mahendra laid the foundation stone of the factory in 1962, and the mill was subsequently established under the Companies Act, 1964.

The factory once operated as a major sugar producer. Its highest recorded production came in fiscal year 1990/91, when it produced 202,750 quintals of sugar after processing 2,309,548 quintals of sugarcane purchased from farmers.

Production declined significantly in the following years. By fiscal year 1993/94, the factory produced 85,000 quintals of sugar after processing 925,000 quintals of sugarcane.

The government decided to close the factory in February 2000 as part of a plan to privatise it. Following the Cabinet decision of Falgun 16 that year, the mill has remained closed.