Entrepreneurs for Nepal

Last Thursdays with Hajuri Bista of Navaras Pickle- A Housewife turned entrepreneur

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When I started business, I was a 39 year old house wife. After getting married, I went to Paris with my husband and spent seven years there as he continued with his higher education. After he completed his PhD, we both returned to Kathmandu. Then we had children and I started taking care of them and the household. When my children started going to school, I had free time during the day so I wanted to do something.So we started working in one of my relatives’ cow farm project for four years. Since there were many people involved and hence many individual interests, I did not like working there. So I left. While working there, I learnt that,

Lesson #1, wherever you work, first of all you should have knowledge in that sector and along with the knowledge you should have interest too.

Hajuri Bista

After that, I started thinking what should I do next? Multiparty democracy system had just emerged in Nepal and opportunities were opening up. At first, my interest grew on plants Nursery so I searched for an institute that could provide me training on nursery skills but could not find any. So, I spent six month reading several books on nursery and about plants but still after that, I could not find any training institute to teach me more. While my search continued, one day I saw an advertisement in the newspaper which was targeted to housewives and the training was to teach how to preserve food. So, I thought the training could be a good use of my leisure time. There were 24 trainees and the training was for three weeks. The objective of the training was to teach us how to preserve homemade food and how to make and promote female entrepreneurship.  The training was excellent, the trainers were experts.  That training drove me towards getting me into the pickle business. During the market survey, we found out that Indian pickle held almost hundred percent of market share in Nepal at that time, so no Nepali pickle was there in the market. This presented an interesting opportunity.

After the training classes and some market survey, I decide to make pickle and the organization from which I received the food preservation training was ready to market my product. “Navaras” was the name of the brand which I chose during my training.  Among the 24 participants only three of us started the company from my kitchen. One of the three also soon left the business because she had a job and she could not manage time for the business. So it was only two of us who started working. Our initial investment was Nepali Rs. 20,000. 10,000 from each.

For the first three years, our working area was my kitchen. We made pickle, took it to the market and solicit feed-backs from the customers. When I started doing this, my neighbor used to ask what was I doing these days because I wasn’t seen much in the neighborhood. I told them about my involvement in the pickle business. I even marketed my products among them. Basically, in our society people take pickle production as an odd lowly job and my interaction with many women shows that the main problem of women involving in pickle industry and other simple commercial activity is the inferiority complex they got from social and relatives’ behavior towards them.  But for me this did not become so much of an  issue, as I used to proudly tell people about my business and even try to sell to them as well while I was listening to such criticism.

Lesson #2: If you are passionate about your idea or business, don’t listen to negative criticism. Believe in yourself, and just do it.

In those early years, we used to participate in every exhibition that took place, be it at the local or national level.  We used to go to these events and market our products and take feedback from the people. There are some instances where I had to spend a whole day from 6 in the morning till midnight working on a stall for an exhibition our pickle.

Lesson #3: Hard work is the bedrock of every successful business.

My husband one day complained about the smell of spices in his dress because we used to produce pickle at home. His work colleagues has started noticing about the smell,so he warned me to stop working at home. So, I had two options – either to leave the business or to expand production outside my kitchen. I did not want to stop the business for which I had dedicated for three years. So I talked with my partner and we decided to expand. I had a small shed behind my house which we renovated and started working from there.

After we started producing commercially, many other competitors came our way, which was frustrating. All other companies had similar types of packaging and size as ours but their price would be lower. But we moved along,as many of the competitors could not sustain the lower prices they offered, and had to close after some time. There was one company who even introduced one pickle in half the price of our prices. But because of our product costs we calculated we could never sell our pickle at such a low price and survive. And in three months time, the company couldn’t sustain and it stopped producing.

According to my knowledge, we are the first company who started selling meat and fish pickle commercially. Navaras now has become a household name among Nepali, both in Nepal and abroad and the main reason is our pickle has a distinctively Nepali taste and on top of that, we don’t use any preservatives.

Lesson #4: Don’t be afraid of competition, if you believe in your product and do bring out new products (variety) to attract new customers.

There are two evidences that I want to share regarding the perception of women in business in our society. One day in an exhibition, a man with his family came to me and asked about the products. I started explaining the product, then he said he was going to buy my product because I was a woman.  That made me really angry. I did not want to sell my products based on my gender, but because of the quality of the product I make. Personally I didn’t face much of the issues of girls being discriminated by the family and society but  I do agree that these issues exist in our society.

Recently, we went to register a new company under my name called Hajuri Industry and create a brand called ‘Kitchen Recipe’. I went through all the registration processes to register my company and when I was in VAT registration office, the officer asked why I needed to pay VAT for selling pickle? They told me(wrongly) that in Nepal, there is market for Indian pickle only, and asked me if there was a market for Nepali pickle.  I just smiled and ask him to register. After the registration he told me that doing business will not be easy after registration and told me not to come crying, seeking help from them as a woman after my business goes bad. Both these incidents gave me further motivation to work to show those who take Nepali women lightly.

Lesson #5: In Nepali society business-women are not taken seriously but use that as a strong motivation to prove them wrong.

While doing any business, two things are most important.  First, its honesty. Honesty not only with lenders and creditors but within your own business. For instance, to minimize cost I never put any low quality ingredients or preservatives. If flies dropped into the ingredients or the final product, I could have thrown the flies and sold that product. Nobody would see it.  but I never did this and that is the honesty I am talking about.  I have never compromised with the quality and I trained my staff according to that.

Second is handling employees well. I did not hire a worker for three years and then I hired one staff and that person is still continuing with me because we respect each other. Now we have quite a few. So, to be a successful entrepreneur, one should care about their staff very much so.

Lesson #6: Honesty about your product and appreciation of your employees are key to a successful business.

Questions and Answers:

Q1. How difficult is it and what are the difficulties for women to be an entrepreneur?

During the time we started, it was very difficult, even to get trainings. Now, there are many training programs for women so it is not so difficult to learn skills and get basic entrepreneurial trainings nowadays. But the situation of the country is getting worse which is creating difficulties not only to women but also to men. There are several co-operatives and organizations that provide proper guidance not only to women but also to the men. I have shared with my cases, as in the case of VAT, but besides that, nowadays, I don’t think there are any extra problems in doing business for women.

Q2. Are you planning to export your product?

There are complications in competing with Indian products and exporting it in the market. First of all, to maintain Nepali taste, we cannot use chemicals. But then if we don’t use chemicals, expiry date will be only for six months. In the other hand, Indian spices have two years of expiry date. Right now we are focusing to expand domestic market. There is enough potential here.

Q3. Could you please show your business in numbers so that young people will realize none of the business is a small business?

For the first three years, I earned only NRs. 30,000 but after that it expanded so much that now our revenue is more than ten million rupees annually. I believe this business is viable long term and will create more wealth in the long run. There is good  market, even Indians are attracted to our pickle now.

Niranjan Shrestha

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I would like to call myself a second generation entrepreneur. My grandmother used to make homemade sweets in Pokhara and sell it to students.  They took the process further and decided to mechanize the sweets making process and start a business. In that process, they went to India and somebody suggested about starting a sweets industry, which eventually started in 1973, the very year I was born. I was 15 day old when the business started. When they started, there were two big players on the scene like Nebico and Pashupati, which used German machinery. We started with handmade sweets but now we are the largest confectionery manufacturer in Nepal. We currently export around 5% to other countries and are looking to export more. We have almost a thousand people working together.

Talking about the difficulties in dealing with the regulatory authorities during the time, I would like to share one interesting story. My parents went to register the company as Laxmi Confectionery. The officials told them to change the word confectionery and use a Nepali name. They didn’t find any word for confectionery in Nepali, so they registered as Laxmi Mithai Bhandar. Another major regulatory hurdle was on buying sugar, our major raw material. There was a big problem we faced which we still do and that is the quota in sugar. A company could receive only a certain amount of sugar. To overcome the hurdle, we divided the manufacturing in smaller units and in all those units there was a name “Laxmi”. After we started the business, we went on to figure out people who could manage the business and the factory in different locations.

We, the second generation, started Sujal Foods by merging two existing units called “Suva Laxmi confectionary” and “Jay Maha Laxmi confectionary”, hence the name “Sujal”. After this we closed all old factories to increase efficiency and focus.

After we started Sujal Foods, we introduced Chocó fun which helped us realize that the chocolate market was growing in Nepal.  In Asia, only bigger players like Cadbury and Nestlé were doing well in India. We felt that we needed a good machine to produce. We attempted to buy one from Gandaki Noodles, which they bought from Austria but were unable to use it despite the fact that it was a good machine. We approached them a lot of times but they were reluctant at first. Later they finally agreed to sell and we bought those machines.  For research and development, we walked around Europe many times. To bring the full line of machines were very expensive and took about one an half to two year to get it. But despite of it all, finally Chocó fun entered the market and now it’s very popular as one of the largest selling brands in Nepal. So, that’s how we started.

Lesson #1: Always be vigilant in bringing new technology to improve your production and introduce new products.

In the mean time, my father started a soap factory. During that time, there was licensing system in importing palm oil. For any smaller businessman to have a license, they had to buy it from bigger businessmen, which was almost impossible. So, my father closed the business realizing there were no possibility to obtain the license to import palm oil. My family was also in the soft drink business producing fanta lamona. Some multinational players came and asked “How many bottles and crates do you have? If we buy all these and dump it, what will happen to your business?” Then we thought this could be a serious problem because they had the muscle power to do it. So we closed down our small soft drink business. This is just to share how bigger players eat small players at certain times, when there is unhealthy competition and weak regulatory enforcement to protect small business owners from large sharks.

Lesson #2: Enforcement of government regulation to protect small business is vital for its survival.

After we entered the confectioneries business, Maoist insurgency started in Nepal but we took this risk as an opportunity and we actually grew our business in the eastern and the western Nepal.  Despite the complaints that there was no access to remote areas during that time, we grew almost 33% and those became our golden days.

Lesson #3: For entrepreneurs, challenges are gateways to opportunity.

After confectioneries, we started Sujal Dairy in Pokhara in 2061 B.S., which is the privatized unit of the government’s Dairy Development Corporation (DDC). I believe, we can claim Sujal Dairy as one of the success story of privatization in Nepal. In the beginning, it was very difficult for DDC staffs to handover the unit to us. Moreover people were very brand loyal to DDC as it has been around for generations. Our challenge was to think of how to get the new brand name “Saffal” to be successful. It was challenging to communicate to people that Saffal was just a new name of DDC. So, we had a team who worked for two weeks to simply develope an idea which we finally agreed upon. We worked on finding out how, when and in which places consumers bought DDC products. We noticed that it was very difficult for consumers during winter to carry cold pouch of milk. So we decided to give one extra plastic bag with our name and inside the plastic bag, we put a pamphlet that said DDC was now converted into ‘Safal’. With this simple technique, each and every customer received a direct message. If we had communicated that through public media, it would not have been as personal or as effective and would have required a large media campaign with big budget. But what we did has now become one of the case studies in Pokhara.

After working in the dairy industry for two years we found out that it was a good business. We worked with villagers and co-operatives. Moreover, dairy industry is the fastest medium to transfer city money to village. In other cash crop, the cycle takes a minimum of ninety days and the maximum of one year like in the sugarcane business. But in case of dairy farming, the farmer gets money every fifteen days. Another challenge in dairy industry is the season. During some seasons, buffaloes and cows give very less milk and in some, farmers literally have to throw milk on the streets. Taking this into account, we started to manufacture milk powder but that did not fare too well. We launched alpine dairy whitener which came up with mega budget but it did not work in Nepal. However, it gave us a very good lesson on technical components on making milk powder. There was a huge communication gap with the marketing and production side and we realized even if we made high quality international standard products, it wouldn’t be successful until we are able tell the story in the local context.  Now we have started the production again but this time we have started very small and trying to enter like guerrilla.

Lesson #4: Even if you have the best idea that you are 100% confident in, it is wise to start small and adapt according to the feedback you get from customer and the market.

Currently, we have acute shortage of milk in Nepal. In the past, we used to have milk holiday and many people left milk production. Hence, to encourage farmers to re-enter the market, we launched a campaign, tying up with Laxmi Bank and insurance company to give loans to farmers without any collateral. We started by giving loans to almost 792 farmers and suddenly the price of the capital went up significantly, because the price of land and feed is increasing. So we hesitated backing individual loans, and now we are opting for a community model. In the mean time, interesting things have happened. One of the guys working in Arab approached us and wanted to start cow farming if there was loan available. We agreed to give him the loan. He came up with developed grass to feed cows and twenty people from that village started planting developed grass for cow farming. They started having more income and now many people of that village have involved similar activities of income generation.

We are still working in developing new products. Where we see good prospects, we have started investment.  There is good market even in India but we are struggling to enter the market. We don’t have any statistics and the research done by government is very weak. We are not able to continue in a good pace and there are many hindrances. But, that is the reality of doing business in Nepal. The key to survival is to be able to roll with the punches.

As someone wise said, “When life gives you lemon, make lemonade.”

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