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Cottage & Small industry business struggling to thrive with stiff competition from imported goods
Most local entrepreneurs operating Cottage and Small Industries (CSIs) still struggle to thrive in the Bhutanese market that is heavily influenced by relatively cheaper and imported products. High production costs, limited human capacity and lack of a bigger market are some of the challenges entrepreneurs are facing today.
To help address the issues, the Department of CSI is taking a group of local entrepreneurs on product promotion programmes across the country. The group was recently at Bumthang. They met with local shopkeepers and businessmen, marketing their products. Tshering Dhendup, Co-owner of DrukPeci said, “Bhutanese have become so accustomed to using imported products and it is very difficult for smaller firms like ours to penetrate the market.
Though the government has been providing us immense support in terms of improving the quality of our products, marketing and budgeting, we need a lot of support from the consumers. There must be a paradigm shift in the way people see local products.” “Local products such as the DrunaGu cookies, Chechay sanitary pads, DrukPeci and others play an important role in building the brand and identity of a country’s manufacturing sector. Moreover, the pandemic has taught everyone a lesson that having adequate local products in the market is really important especially when the import of goods become very inconvenient,” said Chimi Dema, the Owner of DrunaGu cookies based in Thimphu. Rinzin Wangchuk, a Co-owner of Bhutan Herbal Tea in Bumthang said, “as the interest rate for business loans and labour charges are comparatively higher in Bhutan, our production cost increases. That way we have to sell our products at higher rates. This is why people prefer cheaper imported goods.”
The CSI sector is given high priority in the 12th Five Year Plan. The government allocated Nu 1.2bn for the Startup and CSI flagship programme. The Department of CSI being the lead agency in promoting CSIs in the country, various measures and strategies are put in place. “The startups and CSIs mostly struggle when they initially set up their firms, so we help them by building new infrastructures for them. We also ensure access to finance by supporting them in availing loans and moreover the government also provides them tax subsidy when they bring in raw materials and machinery to establish their plants” said Sonam Jamtsho, Industries Officer with the Department of CSI.
However, entrepreneurs say there are still more that needs to be done. “It would really benefit the next generation of entrepreneurs if the education system in the country introduce a business or entrepreneurship course right from the lower classes because, by the time they are of our age, they would have learnt all the fundamentals and acquired the important skills to start off their venture. In our case, we have just been into business for about three years and we are still struggling” added Chimi Dema. Rinzin Wangchuk said, “Even though some of the local entrepreneurs come up with good-quality products, we struggle to get market access in foreign countries. So it would benefit us if the Economic Affairs Ministry and the Bhutan Chamber of Commerce and Industry (BCCI) explore ways for us to export our products in the international and regional markets.”
Despite the challenges, there are over 2,500 Manufacturing and Production CSIs in the country as of June last year. Through the flagship programme, the government aims to reduce import and expand the export base by supporting the growth of startups and CSIs in the country.
As of now, Druksell has collaborated with DCSI to launch a flagship CSI market.