Kathmandu: Min Bahadur Gurung, chairman of Nepal’s leading retail chain Bhat-Bhateni Supermarket, is expanding into manufacturing with plans to establish a large-scale garment factory aimed at export markets. Gurung registered a new company, Garment Gear Pvt. Ltd., in the last fiscal year to spearhead the venture and deepen his footprint in the apparel sector.
The factory will be set up inside the Special Economic Zone (SEZ) in Rupandehi district, in southern Nepal, with a strong export focus. The company plans to produce high-quality ready-made garments, including denim bottoms, leggings, jeggings, trousers, pants, shirts, and knitwear.
Total projected investment stands at approximately Rs 804 million (around US$ 6 million), with a debt-to-equity ratio of 75:25. Of this, Rs 600 million will be financed through bank loans and Rs 204 million through equity investment. So far, Rs 150 million in equity, about 74 percent of the targeted equity portion, has already been secured, and overall financial progress on the project has reached 34 percent.
To fund construction and operations, the company has secured credit ratings covering a total of Rs 1.3 billion in long- and short-term borrowing facilities. This includes Rs 800 million in long-term loans and Rs 500 million in short-term financing. CARE Ratings Nepal has assigned a Double B Minus rating to the long-term facilities and an A4 rating to the short-term facilities. As of 28 January 2026, financial arrangements for the debt component had been completed.
Garment Gear aims to build expertise in ready-made apparel production and target high-potential international markets such as the United States, Canada, Europe, and India, while also supplying a portion of its output to the domestic market. A significant share of the products will be sold through Bhat-Bhateni’s extensive retail network. Once fully operational, the factory is expected to produce around 5.76 million pieces of clothing annually.
The company’s board comprises six directors. Gurung serves as chairman, while businessman Umesh Shrestha is one of the directors. Shrestha is also chairman of LA Group and brings prior business experience, including ventures in cold storage through Agrivastu Cold Storage Pvt. Ltd. Rating analysts have cited Gurung’s established reputation in Nepal’s retail sector and Shrestha’s entrepreneurial background as positive factors for the project.
The factory will be located within the SEZ in Rohini Rural Municipality of Lumbini Province. Raw materials, primarily fabric, will be imported from China. The rating report notes exposure to foreign exchange risk due to fluctuations in the Chinese yuan, as well as potential volatility in global fabric prices. At present, the company does not have a formal currency hedging mechanism in place.
As the project remains under construction, timely completion and successful market positioning after operations begin are considered key challenges. The report also highlights interest rate fluctuations as a potential risk to profitability.
However, operating within the SEZ offers substantial government incentives. Nepal provides a 100 percent corporate income tax exemption for the first five years of operation and a 50 percent exemption for the following five years.
In addition, companies benefit from full customs and VAT exemptions on imported raw materials and machinery, while goods produced for export are exempt from excise duties. These policy measures are expected to enhance the competitiveness of Gurung’s new manufacturing venture in global markets.
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