However, market situation and other factors will be taken into account before the resumption
If the market situation and price improves, the State Trading Corporation of Bhutan Limited (STCBL) has plans to resume exporting boulders and its byproducts to Bangladesh anytime soon, after it ceased operations in 2023.
The company halted its boulder exports to Bangladesh after its final shipment of 500MT in June 2023, primarily due to various complexities.
According to the Officiating Head, Home Store & SML Division of STCBL, market instability in Bangladesh, declining offer prices from Bangladeshi importers, coupled with transporters’ unwillingness to lower transportation charges (which account for approximately 70% of the total export cost) further raised operational expenses, undermining the overall profitability of the business.
Then there were business viability challenges. “STCBL does not own a mine or hold dredging rights, making us rely on third-party sources for boulders. This dependence made it difficult to compete on pricing,” the Officiating Head said.
There were transportation issues on the other hand. STCBL relies on Indian transporters for moving its goods. “With limited availability of trucks, particularly from Phuentsholing due to strict enforcement of overloading regulations, delays became frequent, impacting the timely export of boulders,” he said.
On top of that, the boulder export rate also declined over the years. “The boulder export rate in June, 2023 for our last consignment of 500 MT was USD 19/MT. The current rates for boulders from Phuentsholing are as low as USD 15/MT.”
STCBL in general made stone product exports only to Bangladesh since the beginning, and in its 9 year journey, the company accumulated revenues amounting to Nu 219,116,641.88.
During the first year of its operations in 2015, the company generated Nu 8,565,227.35 exporting 5,995.66MT of boulders. In 2016, the revenue increased drastically to Nu 26,986,331.96, courtesy of the corresponding increase in boulder export at 18,890.43MT. The figures increased to Nu 33,856,491.65 in 2017.
The revenues from boulder exports reached its peak in the next two years, generating Nu 67,279,115.03 and Nu 50,769,498.89 respectively in 2018 and 2019, complemented by the additional export of 20MM, 30MM and 10MM stone chips along with boulders.
However, the revenue took a downward trajectory thereafter as generation plummeted from Nu 18,631,797.30 in 2020, to Nu 1,661,357.48 in 2023.
In the course of these nine years, the company exported a total of 121,824.59 MT of boulders, 20,920.88MT of 20MM stone chips, 12,865.97MT of 30MM, and 2,371.48MT of 10MM, contributing significantly to the national exchequer with a total revenue generation of Nu 219,116,641.84.
The company also opened a liaison office in Bangladesh specifically for the purpose of boulder export. “It didn’t serve any purpose after the boulder exports ceased. So we converted it to a mart known as Bhutan Outlet from February this year. The outlet promotes authentic Bhutanese products,” he said.
STCBL is a government-owned enterprise that plays a crucial role in the country’s trade and commerce. Established in 1975 with its headquarters in Thimphu, it is fully owned by the Royal Government of Bhutan.
The company facilitates the import and export of goods and services, manages the supply of essential commodities and promote trade, and supports the government’s economic policies and initiatives, all directed towards contributing to the socio-economic development of Bhutan through efficient trade practices and enhancing the availability of essential goods.
By Tashi Namgyal, Thimphu
