The export of veneer and plywood has significantly contributed to Nepal's foreign currency earnings and helped reduce the country's trade deficit. According to the state-run national news agency RSS, Nepal has transitioned from relying on imports of veneer sheets and plywood to becoming self-sufficient and even a net exporter of these products made from the logs of softwood trees such as Uttis (alder), Kadam (burflower-tree), Mauwa (butter tree), and others that grow in the hill regions of Nepal.

RSS stated in a news report citing chief of the Mechi Customs Office Rajendra Prasad Chudal that the country exported veneer and plywood worth Rs 5.092 billion through the eastern border customs check post at Kakadbhitta from mid-July 2022 to mid-October 2024.

Veneer sheets, sourced from these tree logs, are processed into plywood. While most veneer sheets are directly exported to India, some are first manufactured into plywood before being exported.

According to Chudal, the country exported veneer sheets worth Rs 736.431 million and plywood worth Rs 5.184 billion to India via the Kakadbhitta customs check post during the past 27 months. In the first three months of the current fiscal year alone, veneer sheets worth Rs 147.136 million and plywood worth Rs 99.332 million were exported through the same checkpoint.

Deepak Pandey, president of the Nepal Veneer Manufacturers Association, told RSS that the veneer industry has made a substantial contribution to the country's economy. This includes generating significant tax revenue, reducing the trade deficit through foreign currency earnings, increasing the income of local farmers by purchasing wood from softwood trees that would otherwise go to waste, and creating thousands of jobs.

Currently, over 120 veneer industries operate in Nepal, providing direct employment to more than 8,000 people, RSS further reported, adding, the majority of these industries are located in Jhapa district, which hosts 38 such factories.

Additionally, there are 80 plywood industries across the country, which produce plywood from locally made veneer sheets. These industries have installed more than 100 machines to ensure they meet 80% of their raw material needs domestically.

Veneer sheets and plywood are mostly exported to India through customs check posts at Kakadbhitta, Biratnagar, and Bhairahawa.