Chandra Tiwari says Cooking is my hobby and that is what brought me to meat products sector
Chandra Tiwari of Nina and Hager, a household name in the Nepali meat processing market, shared his experience and journey as an entrepreneur at the Last Thursday’s program held on May 27th 2010.
Starting his business from a small meat shop to selling a brand name like Nina and Hager in Nepali market, was not an overnight job. It was 15 years of hard work and his dedication in delivering quality products to the consumers that made him successful.
“Cooking is my hobby and that is what brought me to meat products sector.” -Chandra Tiwari
Having received no formal training in meat processing, he recounts going to libraries to search for books on the subject and seeking any help he could find. During that time, sausages were new and popular in Kathmandu and Chandra dai was curious as to how they were made. His interest took him to Calcutta where he was told that he could watch how sausages were prepared when he went to buy them. Unfortunately, when he did go to Calcutta to see the production method himself, the sausage makers had become, according to him “clever” and had been selling the product without showing how they were made. So he returned back without any knowledge. This did not discourage him; he went back home and started experimenting in his kitchen with his wife’s help. He also had a shed which he used for making sausages but he did most of the work in the kitchen itself. He had two refrigerators where he stored his homemade products. He then started selling the sausages in the market. “It was like daily practice for me and I kept on improving my methods to make them better”, recalls Mr. Tiwari. This brought him in contact with a German, Hager, introduced to him by one of his friends. They started talking about the meat processing business and preparation methods.
Observing his work, Hager suggested that the method he had been using was 100% wrong and that if he really wanted to learn and work in this business he should go to Germany. He even offered to arrange for the visit and told him to arrange the paperwork. It took Mr. Tiwari 2 years to go to Germany on a scholarship on livestock training where he trained for two long years and practiced the trade-skill for the following one year in Germany. His two-year course consisted of one year training on the old method of meat processing and the following year on the advanced technology. Equipments for both methodologies are currently used in his factory in Kathmandu.
After completing his two years training he had a sense of accomplishment since many people fail the course and some even take 5-6 years to complete it. His interest and age as well as his hard work garnered appreciation and he became a butcher chef. He decided to return home and practice instead of working in Germany as he thought he’d be making a lot more impact back home.
Coming from a Brahmin family and working as a butcher chef earned him many taunts from his relatives when he was just starting. However, his success and establishment of Nina and Hager product as a household name has now changed all that.
Starting his business was not an easy task since he was not financially stable at that time. He had to rely on his bicycle to make deliveries of his products. After the production stage, marketing was another challenge. Supplying his products in the market where the people questioned the high price, was a tough job. Eventually, the products started selling and were supplied to other markets in the capital. It took another 4-5 years before he could taste any success.
“The hardest part was that even if my products were selling well, I was not receiving any money,” recalls Mr. Tiwari. With only accounts receivables but no cash, he was forced to put a hold on his work for a while. This proved to be fortunate because when he came back home he received many phone calls asking him why he had not been sending supplies and that if it was due to withheld payments, they’ll pay the money. It was then he found out that his products were selling quite well in the market.
Although he now has a very good market and is more established than he had imagined, he still has not been able to meet the market demand because of the need to maintain quality and not quantity. He believes that in the food processing business if one is not directly involved in the process, then the quality can be compromised which can lead to failure of a business. “People at first thought my products were expensive but I had always been focused on the quality and I never compromised it”, says Mr. Tiwari.
Regarding the problems he faced, he says entrepreneurs like him experience problems of margin rate. He’s had to face many issues with distributors who try to increase their margin at every given opportunity which puts suppliers under pressure. His words to young entrepreneurs:
“If you’re strong and confident that your products are of good quality, then you don’t need to be scared of anyone.”
Question and Answers with Chandra Tiwari.
You mentioned earlier that you had a job before going abroad. What led you to take the decision of leaving your job and going abroad?
The thing is my salary, working as a transfer supervisor at USAID before I started the meat processing business, was small. My duty hours were night hours till 12 in the night for 4 days a week and yet my salary alone could not support my family. Everyone has dreams of accomplishing something – I also wished to send my kids to a good school but it was not possible with my salary although in terms of USAID’s standards, it was considered good. And USAID’s salary is better than Nepal Government’s.
There were four chiefs at USAID who decided that the transfer supervisors should work for 16 hours which meant that they had to fire two of us. If I had to resign from the job, I wouldn’t receive additional money except my salary. But if I was dismissed by the management, I would receive my salary, three months bonus, dashain bonus and other benefits. So I raised my hands, thinking that I could invest the money in my factory.
Do you do the slaughtering for the meat processing as well?
We buy all the raw materials on contract basis. We only do the processing part at the factory. We buy mostly chickens from Nepal and import other kinds of meat.
Is import quality better than the local one?
There is a shortage of raw materials in the local market. If I need 12 pigs, I won’t get them easily. It’s not that I won’t find them, buts it’s hard to get all at once. There is demand but our market is not able to meet that demand.
What do you think of the working culture where the owners don’t want to actively participate in the work, especially in the food processing business?
In the food processing business, if you are involved in the work yourself, there’s little chance for a business failure. If the owner just order people to do the work, then the quality of the product will likely be compromised. But if you’re involved in the whole process and control the quality yourself, then the products will attract people. In the 15 years of my work, I have never given out an ad for Nina and Hagers. If some person or an international agency advertises my product on their own account, then it’s a matter of joy for me.
Are you actively involved in the factory work?
We have not increased our production due to our focus on quality control. We have certain hours to do our work. You may not believe it but I start my work by 4 in the morning and wake up even earlier. The morning temperature is very important for this work. The staffs of the first shift arrive at 6 a.m. and the next at 6:30 a.m. then by 9 a.m. we have staff from three shifts. If we need more people in any shift, we call people from the administration. However, we do all the main processing tasks ourselves.
What kind of advise would you like to give the people who are interested to join the meat processing sector but has no trainings? What are the potentials of animal farming (husbandry) in a country like ours?
If someone is interested in working in the meat processing sector, the PASHU SEWA BIBHAG organize trainings in China for three months. Like I said earlier , I buy most of the chicken in Nepal. If anyone is interested in animal farming, there is a huge shortage for pork meat, as well as goat and sheep. 80% of the supplies are brought from India. In addition, there is a lot of demand for duck meat as well, which is not found here. If someone starts a duck farm, it won’t fail.
If this kind of farm is started on cheap lands, near highways and having good water supply, then the farm won’t fail. If anyone starts an animal farm for the meat business, they have a good chances of making a profit. I’ll also be the one buying your product since there aren’t any suppliers here.
Why don’t you produce it yourself?
If I start producing then it’ll be like placing your legs on two boats. Should I work in processing or farming. I like to focus on what I know.
Is the reason for not buying meat products here because of low production or lack of supply or because of quality as well?
The thing is, when we buy any animal, their ages should be the same. For example, I may need lambs but if I buy lambs of different ages, it will affect the quality of the meat. If every thing is mixed together, it can affect the consumer. For example, if I send that meat to a hotel, then someone might be enjoying the meat while someone else might be spitting it out. Most of the meat used at parties are treated with tenderizers in order for all the meat to be cooked and the reason is due to the different ages of the animal.
How is the demand for export of your products?
Yes, there is a lot of demand especially of pork products. Most of the butchers in India are Muslims and they don’t work with pork. So pork products are difficult to find in India. We supply a lot of pork products during Christmas and New Years time. We receive orders 4-5 months before hand. If people can run farms like the Hetauda livestock, then the business will never fail. It can capture the Indian market.
Many developed countries don’t like running slaughter houses in their country. There are possibilities for country like ours to export the meat to these countries. Do we have any assurance for the quality test that we need to pass before exporting?
As I mentioned earlier, we mostly buy chicken in Nepal. The place where I buy chicken meat has a vet doctor who checks the entire batch which he ok’s and then they are slaughtered and brought to us.
One or two of the places where we supply our products, take samples every 2-3 months to check them in the labs. Yearly, foreign inspectors from UK come to conduct a check on our products. When they conduct these checks, it benefits me. In case my product don’t pass these test, then I’ll be sued. I have an agreement with them stating that if anyone falls sick by consuming Nina and Hager products, then I need to bear all the cost. So, its not because of fear but also due to my responsibility that we focus on maintaining quality. Since, we could not get quality meat here, we regularly import them.
What are the challenges a new entrepreneur needs to face in the politically unstable country like ours?
When I first started this work, there was a lot of demand for processed meat. There were only 2-3 factories which were big. The most important thing in starting this business is finance. If you have adequate finances, then you can start your work anytime. If you don’t have finance, then the first thing you need to do is run to the banks. If you have not done any work then the banks hesitate to loan you the money. The banks too look for experience.
Before going to Germany, I first went to Agriculture Development Bank. They laughed when I told them I needed the loan to raise chickens. They asked me where I planned to raise poultry, how many rooms I had?
There if you are dressed like a needy looking villager, they’ll approve the loan believing that you are actually an authentic poultry farmer. But if you ask for a loan dressed smartly, they assume that you’ve come there to raise money to buy a suit (and con them). Access to finance is a huge problem here.
How do you face frequent, long term Bandh’s in Nepal, how do you manage production and supply?
We’re used to Bandhs’ now. In the past, we did not have a lot of storing capacity but with increased business, we enlarged our storage capacity as well. When we have bandhs and our raw materials don’t reach us, we use the stocks that we had specifically stored for bandhs. Sometimes when we have bandhs for 7-8 days, the demand for raw materials increases a lot then. When there’s a bandh hotels overstock as well, and so does the common people. People buy everything they can when there is a possible bandh around the corner. We have maximum sales a day before a bandh. Sales figures in 7 days takes place in one day before a bandh.
Bandhs have not affected the sales till now. If there is no raw material then that’s another thing but sales increase when there’s a bandh. Besides bandh’s take place during the day not at night so we use emergency lights and go to hotels at night to deliver the supplies.
Have you got any future plans of training people who want to come in the meat processing business?
I have a wish to do that but the main problem is the need for adequate space. I want to start a training school and I am certain that many people who will come there. I have had a lot of demands and requests regarding training, especially from manpower agency. In the UK, there is a lot of demand for trained butchers but you rarely find a trained butcher here. They are not so educated either and it is hard to make them understand things. If you teach someone something one day then they’ll think it’s only for one day and not the other day. The workers are mostly SLC pass and they work in that way.
How many workers do you employ and how well do you pay them?
We currently employ 20 people including my 4 family members and the driver.
My driver is only a driver when he’s delivering things outside but if he does not have any work outside he has to come back to the factory wearing an apron and has to work at the factory too. We multi-task well and we pay our employees accordingly.
The work output has been good. I’ d like to say that the work that is done in my factory by 20 people, If carried out in another factory, it will take no less than by 50 people. And our turnover /profits have been very good.
People here as soon as they acquire some skill or even if they don’t get it as soon as they learn something they want to go abroad to America, Australia, and Qatar. What is your message to such people?
I call any educated people who goes abroad plain foolish.(there is so much potential here to succeed).
[ Last Thursdays program is organized by Entrepreneurs for Nepal and Samriddhi, the prosperity foundation, Change fusion Nepal along with Dwarika's hotel ]
