CHAPTER 1

INTRODUCTION
1.1 CONCEPT OF THE PROJECT MANAGEMENT
In simple meaning any kind of temporary activities which has certain purpose,
define goal definite resource along with which has define beginning and ending date is
known as project. Goal once achieved cannot get repeated in nature. Project always must
come an end i.e. project started gets terminated project is also known an artistic endeavor.
All project operated with in the constraints of time, cost and quality performance.
They are unique, uncertain and accomplish impermanent tasks. The concept of project
has begun during second world ware known as Manhattan project which was undertaken
by British. This project was related with the development of atomic bomb since then the
formal concept of project has begun. To develop the developing countries the concepts of
project is boost up.
According to Cleland and king "A project is a combination of human and nonhuman resources pulled together in a temporary organization to achieve a specified
purpose."
According to project management institute of USA "A project is a temporary
endeavor undertaken to create a unique product or service".
Every project has specific objectives. It works within the constrains of time cost
and quality on a dynamic environment.
Project approach is based on sound planning clear objectives, logical coordination of resources, effective implementation, and timely control and evaluation. It is
a systems approach to implementation.

1.2GENERAL BACKGROUND
Nepal is a country with many mysteries which have touch or the sensibilities of the
adventures around the world who have carved to be here in the Himalayan country. This
country below the majestic Himalayans has a variety of interesting things to see, feel and
to be with. Apart from its natural beauty Nepal has been known all over the world for her
precious handicraft culture. Handicrafts have been a valuable part of Nepalese heritage.
Handicrafts express the great tradition and proud culture of our great kingdom.
Handicraft is the one fact which is able to give recognition of Nepal all over the world.
The origin of handicraft may be traced back to the Stone Age when human beings were
obliged to work with stone tools. The history of articles of everyday use may be as old as
the history of man living in Nepal itself but the history of artistic handicrafts probably
can be traced only since the fifth century A.D. Nepalese arts and culture were the result of
the Nordic Aryans coming from India magnetic plains and moving with the different
group of Mongolians. Their art and culture which are religious in character and symbolic
in meaning developed in Kathmandu valley and western hilly region of Nepal within the
brahminical and Buddhist concepts. Nepali religion and traditional culture is reason
behind the organization of artistic handicraft. We can also say that Nepalese culture and
Nepalese Handicraft are synonymous.
Strictly speaking handicrafts are occupation that involves making usable to decorative
product by hand. In other words handicrafts can be defined as product that are totally and
partially made by hands produced with low capital investment, often have a design that
reflects local cultural factors and are generally made from material available with the
producing country. Before the industrial revolution all such products were handmade,
often in the home. The age of machine nearly did away with the traditional crafts by
fostering mass production. Whether as a hobby or a vocation handicraft encompasses
activities that repair a variety of skills.

Nowadays, Nepal is one of the largest exporter countries in the world in the field of
artistic product. Many Nepalese people are involved in handicraft business, however, we
have many organizations and people to save and promote our glorious art and skills for
the new generation. Organizations operating from both government sector and nongovernment sector are contributing their efforts to preserve our art and Heritage.
Many types of natural resources are used in the production of handicrafts related goods in
Nepal. For instance, plants, wood, clay, stone metal, animals and so on. Through this
resources many products are produced such as paper product, leather jewelers etc. Among
these various handicraft products from last five years one product has increased its
market in international areas. It is a Nepalese hand made paper which we are going to
evaluate its condition on the base of exports range and analysis.

1.2.1 INTRODUCTION OF NEPALI HAND PADE PAPER

Nepali handmade paper is primarily made of Lokta raw material and it is known by the
name of Lokta paper also. This sort of paper looks peculiar soft light, smooth excellent
for its attractive texture and is the most preferred in Nepal. The paper is generally
produced in the hilly region of the country. The raw materials Lokta is skin/bark of the
Lokta plant a sapling sticks of about 5-7 feet in height/length. The words Lokta refers to
one of the local species of Daphne cannabin of Daphne papyracea a small woody plant of
laurel family. It is also familiar to Nepalese people by the name of BARUWA OR
KAAGATE PAAT. . Best quality of Lokta stick usually grows and exists at the attitude of
6000 to 10000 feet over the highland of Nepal. Daphne the great festival of Nepal falling
in October each year signals the seasons beginning Lokta collection. This plant has got a
specific feature of regeneration to maturity again within 4 to 5 years after cut despite of
being destroyed. Handmade paper is unique product representing Nepalese tradition, arts
and skills. The history of this paper is very old. In the past, it is used to Tamashuk (old
legal documents). Most of the Hindu and the Buddhist religions guidelines were written

in this paper. It is said that Tibetans people who are migrated to Nepal from Tibet
introduced this paper. Any writing done in this paper particularly using black ink does not
become dims for a long period, therefore the Lokta paper is quite mandatory to use in
writing/ documentation, order/ verdict sheets and all records of court, individuals /
Banks companys monetary transactions records paper especially of land/ lot house, real
estates, transactions of debenture, shares agreements, contracts etc
Nepali handmade paper is prized for its attractive texture, durable character and anti pest
nature however its unique quality its demand in the international market which is
supposed to be growing rapidly. As a result of favorable demand in the export market,
there is rising interest in manufacturing this traditional paper. A large number of low
income level people have got enough employment opportunities in such cottage and
handicraft works. Nowadays, there are many products to export to foreign countries
which are made by handmade paper such as wallpaper, wrapping paper, notebooks,
writing sets, envelopes, photo albums, greeting cards, curtains, paper boxes decorative
papers etc. These paper products have a great demand in the international market; the
paper product manufacturers felt a need of an association to make raw materials
sustainable and to develop market, besides safeguarding their other common interest.
As a result of favorable demand in the export market, there is rising interest in
manufacturing this traditional paper. It is estimated that currently about 170 cottages and
small scale handmade paper enterprises are operating in different parts of the country
providing employment opportunities to thousands of people.

1.3 STATEMENT OF PROBLEMS

Nepal is suffering from frequent political changes which have adversely affected the
growing condition of handmade paper industries. The resources available for the
handmade paper industries in Nepal are not in appropriate amount. Because of this the
size and number of handmade paper industries established are really in the diminishing

stage. The government seems to under look on the protection and preservation of these
industries. Consequently the owners are discouraged and the financer felt unsecured of
their investment. This condition really violates the peace and competitive environment of
the handmade industries. The quality of handmade paper is gradually decreasing due to
the improper management in the handmade industries, strikes by the worker and
groupism in the work. The handmade paper products are expensive which is not
affordable to the local people. Hence these products can flourish only on the foreign
country. But due to the delays in export, Nepal loses its faith on the export of the
handmade paper. The internal market for the product is below the expected level. Hence
handmade paper industries are really facing hard times in Nepal and are continuously
raising their efforts for the development. In this regard the government along with the
concerned departments should be conscious for their fruitful efforts. Lack of skilled
manpower, transportation, communication also violates these industries.

1.4 OBJECTIVES OF STUDY

The study has been carried with the primary objective of evaluating the handmade paper
products and handmade paper industries in Nepal in terms of their development. Beside
this it has the following objectives.
To know and evaluate the export business of handmade paper products.
To know the problems which was observed by handmade paper industries in
Nepal?
To classify the present condition of handmade paper industries.
To get some knowledge and information which are directly and indirectly related
to the handicraft sector.

 To know the export quality of the handmade paper made in Nepal.

To know how we can increase export level of handmade paper in foreign country.

1.5 SIGNIFICANCE OF STUDY

The study is mainly concerned with the handmade paper products of Nepal. The
benefits provided by handmade paper products and its industries are discussed below.
This study helps to provide reliable informations regarding the handmade paper
products and its industries.
This study shows the current position of handmade industries in Nepal.
The study is focused on the export of handmade paper. It provides reliable data in
the export field.
The study shows that many people are employed by the handmade paper product
manufacturing industries. These industries provide the employment opportunities
in the internal environment
The study promotes for the development of handmade paper products.

1.6 LIMITATION OF STUDY

Though the study is aimed to achieve the objective mentioned above, a few
limitations are faced during the fieldwork. They are as follows:
Area coverage is confined only to Kathmandu and sindhupalchocwk district.

 Due to small area coverage, sample size taken for the study is limited
Lack of proper and systematic recording system of entrepreneurs about their
business provides inadequate informations for the fieldwork.
The time duration is limited.

1.7 METHODOLOGY
There has been different methodology in this fieldwork. This fieldwork is based on
mainly adopted primary data and desk research, the fieldwork is done only to collect
the primary data. To collect primary data I used different techniques, secondary data
from many sources and collect the valuable materials, journals, publication etc to
support our evidences. However information and documents collected from many
sources, experts and officials has been analyzed and interpreted to fulfill the
objectives of this field work.

1.7.1 SOURCES OF INFORMATION

The main sources of information are HAN, Ministry of commerce, handmade paper
association, Trade promotion center, UNDP (United Nations Development Program)

1.7.2 RESEARCH PLANNING

The planning is done only to collect primary data from many reliable sources.
Different personal interviews, answers from questionnaires, views and opinions of
entrepreneurs and other people were gathered to meet the objective of the study. The
study is descriptive as well as analytical in nature.

1.7.3 TOOLS USED

The collected data from different sources were presented systematically in table,
diagrams. Statistical tools were also used to facilitate the study.

CHAPTER 2
PRESENTATION AND ANALYSIS OF DATA
Handmade paper has traditional value and this traditional product has new emerged
into industrial good, as a part of Nepalese economy and a millennium has passed
since the Tibetans introduced the skill earlier Chinese technology of paper making to
Nepal. Now new process and technologies are being introduced and used, Industrial
value of this paper is, its exceptional and has durability and far its lively and special
texture. Nepalese craftsmanship has been producing handmade paper form a thousand
of years and they use natural paper for scared and popular masks. For kites,
manuscripts and for printing of scared tests. Today, a new interest in traditional
products has awakened our Nepalese paper craftsman and they are producing
greetings cards, gift wrapping bags, stationary set, note books, curtains and lamp
shade etc. Now the craftsman of years have been become entrepreneurs and even
producers this eco friendly paper is very popular in many parts of the world. A parts
from it is exclusive characteristics, its closeness to ecology is the reason behind its
popularity. Due to this reasons handmade paper products are exported all over the
world as one of the high exporting handicrafts products cone in the 6th positions.
According to the country wise exporting data related with handicrafts Nepalese
handmade paper is exported all over the world from Nepal bur mainly on 54 countries
and among those 54 countries on the base of increasing export quantity. USA, UK,
Switzerland, France, Japan, Canada, Australia, Germany, Italy and India are main
importer of Nepalese handmade paper products from Nepal.
The exports of handmade paper on the base of country wise export shows the export
figure which is shown on the table the export quantity of the major 10 countries on
which they imported.

2.1 PRESENTATION OF DATA

Table 1: Export of Handmade Paper Products with yearly change
Years
Total Export (Rs)
Percentage Change (%)
2056/57
183266479
32.58
2057/58
190987925
4.21
2058/59
242859397
27.16
2059/60
275374703
13.39
2060/61
301725045
9.57
2061/62
263764274
-12.58
* Percent change is based on Total Export of each handmade paper products comparing
to previous year
Source: Handicraft Association of Nepal, Thapathali Height.
The above table 1 consists of total export value of Handmade Paper Products over the
five year period from the fiscal year 2056/57 to 2061/62. Under the 5 year trend, we can
observe different fluctuations in the export value of the Handmade Paper Products. In the
fiscal year 2056/57 total export value was Rs 183266479 with a positive increase of
32.58% over the previous year 2055/2056. During the fiscal year 2057/58 the export
value rises to Rs 190987925 with a small change of 4.21% then the year 2056/57.
Similarly for the fiscal years 2058/59, 2059/60, 2060/61, 2061/62 total export value is Rs
242859297, Rs 275374703, Rs 301725045 and Rs 263764274 respectively. The export of
handmade paper products is in the increasing trend. But there is a decrease by 12.58% in
the fiscal year 2061/62 in comparison to 2060/61. The percentage change is negative in
the fiscal year 2061/62. The reason behind this fall in export may be the disturbances in
the Nepalese economy by the political changes, lack of maintenance of quality in the
handmade paper product, increase in the cost of product, improper management etc. Its
extremely dangerous for the handmade paper producing manufacturing companies to
have the negative return on their investment. It should be handled properly else the export
ratio on the coming year could decrease below the fiscal year 2061/62.
Figure 1

Figure 1 indicates yearly export of handmade paper along with the respective percentage
change compared to the previous year. From the figure it is clear that the export value is
in rising trend from the fiscal year 2056/57 to 2060/61. However, there is a fall in the
export value in the fiscal year 2061/62. The overall percentage change is dimishing each
year. It is the highest in the fiscal year 2056/57. The overall trend of export value seems
satisfactory. Though the export value is increasing up to fiscal year 2060/61, the rate of
increase in the value of export compared to the previous year is decreasing each year. So
we can conclude the handmade paper business in Nepal is gradually improving.

10

Table 2: Portion of Handmade paper products in total Handicraft goods

Years

Total Export of

Total Export of

Percentage occupied

Handmade

Handicraft Goods

(%)

Paper

(Rs)

Product(Rs)
2056/57
183266479
7162705838
2.56
2057/58
190987925
6823162793
2.80
2058/59
242859397
2719636490
8.93
2059/60
275374703
2552952543
10.79
2060/61
301725045
2571841423
11.73
2061/62
263764274
2849476340
9.26
* Percent occupied is based on Contribution of Handmade Paper products to Total Export
of Handicraft Goods
Source: Handicraft Association of Nepal, Thapathali Height.
Above table 2 indicates the total percentage occupied by the export of handmade paper
products in the total handicraft goods exported. The total export value of Handicraft
goods in the fiscal year 2056/57, 2057/58, 2058/59, 2060/61, 2061/62 are Rs
7162705838, Rs 6823162793, Rs 2719636490, Rs 2552952543, Rs 2571841423 and Rs
2849476340 respectively. The value of total Handicraft goods exported is decreasing for
the first four years. The value has risen in the last 2 years positively. The portion of total
handmade paper products in the total handicraft goods in the fiscal year 2056/57 is
2.56%, for fiscal year 2057/58 its 2.80%, for 2058/59 its 8.93%, for 2059/60 its 10.79%,
for 2060/61 its 11.73% and finally for the fiscal year 2061/62 its 9.26%. Hence we can
say there is a rise in total percentage occupied by handmade paper products in total
handicraft goods though the export of total handicraft goods are decreasing. This tend can
be seen up to fiscal year 2060/61. In the fiscal year 2061/62 this percentage has
decreased. This clearly indicates there is decrease in the export of handmade paper
products in 2061/62
Figure 2

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Above Figure 2 clearly shows percentage occupied by the handmade paper products in
total export of handicraft goods. There is an increase in export of handmade paper up to
fiscal year 2060/61 and fall in 2061/62. The export value of total handicrafts is in
decreasing trend for the first fours years and increases on the next 2 years. The total
percentage occupied by the handmade paper products in the total handicraft goods is
significantly increasing from the fiscal year 2056/57 to 2060/61. But there is a fall in the
fiscal year 2061/62 as clearly shown in the above figure 2. Overall this situation is
profitable to a handmade paper manufacturing industry. But the proper concern should be
provided on the quality maintenance and market expansion strategies for the development
of handmade paper product industry for the coming years.

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Table 3: Countrywise Export of Handmade Paper for Fiscal Year 2061/62

S.N. Country Name
1
USA
2
France
3
Japan
4
UK
5
Italy
6
Belgium
7
Spain
8
Australia
9
Canada
10
Netherlands

Total Handmade Export (Nrs)

71139782
51516522
19444785
16181275
13680325
10416707
9205582
8238874
7215148
5253963

Rank
1st
2nd
3rd
4th
5th
6th
7th
8th
9th
10th

Source: Handicraft Association of Nepal, Thapathali Height.

Above table 3 shows the hierarchical export value of handmade paper product to different
countries. Nepalese handmade paper products are exported to nearly 79 countries of the
world. Among them the major 10 countries are listed above. They are USA, France,
Japan, UK, Italy, Belgium, Spain, Australia, Canada and Netherlands. The total export
value to these countries in the fiscal year 2061/62 are Rs 71139782, Rs 51516522, Rs
19444785, Rs 16181275, Rs 13680325, Rs 10416707, Rs 9205582, Rs 8238874, Rs
7215148 and Rs 5253963 respectively. These export value clearly shows that high export
is made to USA. This shows that the handmade paper products are highly preferred and
consumed by the people of USA. After USA other countries like France, Japan, UK, Italy,
Belgium, Spain, Australia, Canada and Netherlands also prefer the handmade paper
products of Nepal

Figure 3

13

Above Figure 3 clearly shows the country wise export of handmade paper products
for the fiscal year 2061/62. According to the above figure, the total export made in
USA is higher than any other country as presented in the figure. After USA, France,
Japan, UK, Italy, Belgium, Spain, Australia, Canada, Netherlands etc prefer to import
the handmade paper products from Nepal. The Nepalese handmade paper products
are exported in USA in large amount either in terms of quantity or in terms of money.
Hence the local producer is benefited with this opportunity. However, the export
value of other countries should also be tried to increase in the coming years.

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2.2 STUDY RESULTS

According to our study and investigation there is no doubt on Nepalese Handmade
paper products. It is an emerging trade of our nation which is representing our trade
and culture from our skills and art of the product, all over the world. Now Nepalese
handmade paper product industry has become victim of its own success because of its
prized for its strength durability and beautiful texture. Due to this reasons handmade
paper product are exported all over the world as one of the high exporting handicrafts
products. Nepalese handmade paper has a various benefits and we can get many
utilities from it. In remote areas of Nepal this paper has been used frequently in the
field of medicine as well as seeds of plants, herbs, medicine, powder is wrapped in
the paper is found to be preserving its efficiency.
Due to its durability and strength from many years all the government judicial bodies
are using this paper for their official work. Now a day, it has great demand in
international market. According to demand, it is made by hand as well as machine for
large production to fulfill its demand. At present context, there are many products for
exports in foreign country which are made of handmade paper such as wallpaper,
envelopes, curtain, notebooks, bags, greeting etc. These goods are in great demand in
foreign country. Although the demand for handmade paper in the international market
is still high ironically enough but the manufacturers have slowdown their products
due to the shortage of Lokta raw materials. Nepalese handmade papers are sold in
various countries. In Nepal a very little quantity is in demand so most of the product
are exported in third countries like USA, UK, Japan, Germany, France are the major
market of Lokta paper. Handmade paper industries are the largest exporter among the
handicraft goods exported after woolen and pashmina. USA is the largest market for
Lokta paper and almost 40% of Nepalese exports of handmade paper products are
sold there. The export of handmade paper products to other countries are found to be
increasing significantly from the fiscal year 2056/57 to 2060/61. However there is a

15

fall in this ratio in 2061/62. The total export of Handicraft good are decreasing from
the fiscal year 2056/57 to 2059/60. However there is an increase in the year 2060/61
and 2061/62. The portion occupied by the handmade paper product in the handicraft
goods are significantly increasing each year. Finally we can say that this Nepalese
handmade paper has been increasing its value day by day in foreign market.
From this research report I found also the problems of handmade paper industries in
Nepal.
Problems faced by handmade paper products business in the market are as follows:
A. Market
It is well known that handmade paper industries have established their position in
European and American market. But there are still market problem. They do not get
regularly and in the local market due to high price, most of Nepalese buyers cannot
afford it. So they are always in search of new and regular market.

B. Production Process:
It is quite different from other products though different new equipment of
technologies are introduced and used, the customers demand are for natural product
made especially by hand. The use of modern technologies may be the cause of the
market declination. So entrepreneurs have to use traditional method to maintain
products natural status. As per the demand of customers they have to use vegetable
dye instead of chemical dye to co lour the paper. Since the demand of the buyers is
for the purely handmade products, the production process is difficult, costly and time
consuming.
C. Product Limitation:
The major problems expressed by entrepreneurs are product limitation by their
competitors. They hesitate to participate in national level trade fair and exhibition as

16

they fear of the products will be imitated by competitors. They hardly allow other
people to visit their workplace. Then main problem is competitors copying the
product and exporting in low price and capture the market. There is not any effective
copyright act in Nepal.
D. Finance:
Though their initial investment is on between NRs.100000.00 to 260000.00.
Entrepreneurs are facing problem regarding working capital only few financial
institutions provides loan for working capital.
E. Raw materials:
Due to decline of Lokta there may be shortage of raw materials in very near future.
Previously Lokta was cut haphazardly and with no reclamation. So there is lack of
raw materials and due to this cost of handmade paper is also high.
F. Skilled Labour:
One of the problems of handmade paper industries is lack of trained manpower. There
is no training institute which provides such skills. They have to hire expert and give
training to their staff. As market is dynamic they have to change design frequently
and produce new product, due to lack of skilled manpower this is mot possible. Since
the customers demand is purely for handmade paper products, skilled manpower is
essential. But there is always lack of skilled manpower.
G. Business Culture:
The indigenous business and trading tradition on Nepal is not compatible with
international practice, and is seen as not being professional. Many businesses are seen
as having low level of core business skills. There is general lack of enterprising
behavior with respect to proactive marketing to export markets. This can be seen at all
levels, both within businesses, business support organizations and government.

17

H. Market Awareness:
Lack of awareness of the demands of the market by Nepalese suppliers is seen as one
of the key factors that inhibit the importing of products from Nepal.
I. Communication:
It is difficult to establish strong communications links between the buyer and seller
because of limited use of email, fax, telephone and slow postal service in Nepal and
also Nepalese exporters not making overseas visit.
J. Transportation:
Nepal is landlocked country. So shipping the goods is expensive and difficult. It is
very difficult to compete with international trade.

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CHAPTER 3
SUMMARY & CONCLUSION
3.1

SUMMARY

In this project work An evaluation of export business of Nepali handmade paper, there
are briefly summarize about background of handmade paper, objectives of project work,
and export performance of handmade paper are mention os introduction phase, this
introduction phase helps to understand about different aspects of handmade paper and
present situation of handmade paper industries. In research methodology there has been
mentioned method used for collection primary and secondary data. The introduction
phase helps to understand about different aspects of handmade paper and present
situation of handmade paper industries.
In data presentation and analysis there are exporting data of handmade paper in foreign
countries. There are tables and figures of exports of handmade paper in different year
which helps to understand of contributing of national economy growth rate of exports of
not and how to develop handmade paper industries systematically and smoothly.

3.2

CONCLUSION

After making the complete report writing the conclusion are:

The export business of hand made paper play great role in national economy.

It helps to fulfill giving opportunities of employees.

It must use natural resources of our country.

19

It helps to earn foreign currency and decrease trade losses.

It helps to decrease trade losses.

For increasing the exports of change it is very necessary to trained manpower for
effective work.

Government and manufacturers must be making programmed to preserved Lokta

raw materials.

After this research, I found no government support to the entrepreneurs.

3.3 RECOMMENDATION

To give sustainability to handmade paper business the support from government to

entrepreneurs support are very essential. Although handmade paper association but no
activities are forthcoming so far. Handicraft association of Nepal in only one
organization which is actively involved in enhancement of skills of handmade paper
entrepreneurs to enhance the skills and to explore new market through new product
HAN has implemented this project there are many areas to be improved in handmade
sector.

Government must be introduced new favorable policy.

To give training opportunities to workers for their skill development by

government level.

20

Government must provide good environment for export of products.

Government must provide a loan to entrepreneurs in minimum interest rate.

Assist Nepalese businesses to develop export trade by attending overseas trade

fairs, promotional events and visiting customers.

Identify market oriented agents who can provide high quality representation of
buyers needs and act as an efficient intermediary between producers and buyers.

Develop a Nepalese based design center that would provide ongoing product
design and development support to producers.

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