After a new management took over in 1999, the company began to recover, according to company officials. In 2003, gross sales reached Nu. 302.19 million and a year later, it increased to Nu. 352 million.

BBPL liquidated its loans in June 2005 after it was excused from a portion of the outstanding amount by the finance ministry.

Asked how the company would do this year, “it is too early to comment,” said the managing director, Singye Dorji, who joined office last year.

This year, the company faced an increase in the cost of production. Price of wood, paper and chemical had increased and employment cost had also increased after the salary revision, said Singye Dorji. He added that the withdrawal of the concession on import of lamination paper and chemicals from third country had come as a major setback. The company pays a duty of 20 percent on importing lamination paper and chemicals.

The company was also facing a shortage of wood supply and buying it from private suppliers at a higher price.

Singye Dorji said that the only way out was to raise the price of the product. This year the price of the particleboard, which constituted about 85 percent of the company’s product, sold to India, was revised by 37 percent. About 85 percent of the market is in India and the rest in Bhutan.

“The price revision resulted in a lot of chaos in the unorganised Indian market which is filled with tough competition from local as well as imported products from Thailand and China,” said Singye Dorji, adding that the company had to offer discounts and sign special memorandum of understandings with distributors.

This year, the company is aiming to increase the revenue to Nu. 405 million from Nu. 396 million earned last year.

The company also had other problems.

“The most critical concern is the age-old plant and machinery which has been here since the plant started and it needs either replacement or parts need to be changed,” said Singye Dorji. “Everyday there is a breakdown and almost every two months we have to shut down the factory for repair and maintenance,” he said.

Singye Dorji claimed that the company lost about a million ngultrums daily when the factory was shut down.

According to the managing director the current machineries would function for another two to three years upto a maximum of about five years.

Another problem for the company was the mismatch in the current size of the board- the main product- and the size in demand in the Indian market. BBPL produced boards sized 8 by 4 feet while the preferred size in India was 6 by 9 feet.

Singye Dorji said that their products sold in the Indian market mainly because of the superior quality and added that enhancing the board size to 6 by 9 feet would boost sales.

Officials said that the company faced immediate shortage in the supply of wood. For the next five years, the company would be supplied wood from the 1,700 hectares plantations in Gedu and Samtse.