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 MIN RATNA BAJRACHARYA GREENHOUSE EFFECT: Women at the Dabur Nepal nursery in Banepa stoop to tend herbal plants last week. |
Except for the first five years since it established a joint venture here in 1991, Dabur Nepal has never had it easy. First, there was the disruption of the conflict years and in the past two years the instability has affected production, but Dabur has stuck it out in Nepal through thick and thin. It has invested in a state-of-the-art juice production facility in Bara, plantations and a network of cooperatives throughout the country.
With an annual turnover of Rs 4 billion, Dabur is one of the success stories of the new economic policy of the early 1990s, and one that demonstratesthat foreign investment in Nepal is still a viable proposition. Dabur exports 70 per cent of its production and the rest is sold within Nepal?proving that the Nepali market now has critical mass for manufacturing. Its range of products include Real juices, honey and a spectrum of health products that use herbal ayurvedic raw materials cultivated in greenhouses and by farmers across Nepal.
"Nepal is a very important investment for us, it is an important production base. The bureaucracy is very cooperative , accessible and ready to hear us out and we are producing for the local market," explains Dabur Nepal CEO, Udayan Ganguly.
Dabur's Greenhouse Project for Medicinal Plants is the other reason the company is in Nepal: most of its herbal raw material grows naturally in the Himalaya and even those that are found in the wild can be cultivated. Just stripping herbs from the forest would be unsustainable, so the greenhouse tries to cultivate them to create a sustainable source of medicinal and aromatic herbs.
Since 1998, this nursery in Banepa, with another one in Marpha, have been involved in conservation and research into 25 species of endangered Himalayan ayurvedic plants. Banepa alone produces 6 million saplings of medicinal plants per year, and these are distributed to 46 farmers' cooperatives in 19 districts across Nepal, giving direct employment to 5,000 people and indirectly benefiting 25,000 others. The Banepa nursery employs 85 workers, all women from surrounding villages.
"Mostly ayurvedic medicine is derived from the roots of herbs, so uncontrolled harvesting in the wild can lead to their extinction. What we do here is try to find ways to cultivate them," explains Dr Sarvepalli Badrinarayan who heads Dabur's Medicinal Plant Project.
For example, one of the traditional ingredients in Chyawanprash is akarkara. It is a traditional Himalayan herb, but Dabur used to import it from Morocco. "Now we are 100 per cent self-sufficient in akarkara here in Nepal," says Badrinaryanan.
The company works closely with farmers cooperatives and government agencies to sell saplings of herbs to farmers at one-third the cost with a 100 per cent buy back MoU at the prevailing price minus two-thirds previous pending. Farmers in Humla, Mustang, Manang, Nuwakot, Kailali, Terathum have benefited, earning up to Rs 40,000 per hectare from this herbal cash crop. Land that was barren is now green with endangered herbs like kutki, jatamasi, chiraita and shatavari. Dabur hopes to set up greenhouse nurseries in Bara and Terathum as well and is experimenting with drip irrigation.
Dabur Nepal's unique effort to conserve nature and empower farmers at the grassroots is the reason the company was selected as the Nepali Times 'Company of the Month' for August. Ganguly said in an interview: "The contribution to conserving endangered plants and employment generation in remote areas is our Corporate Social Responsibility Project. Unlike charity, it has a strategic fit with our business."
Dabur has gone a step further in helping farmers with micro-financing options in partnership with Nabil Bank giving farmers collateral-free loans to buy the saplings.
Previous Company of the month:
November 2007
December 2007
January 2008
February 2008
March 2008
April 2008
May 2008
July 2008
"We are optimistic about the future"
Udayan Ganguly is the CEO of Dabur Nepal. He spoke to Nepali Times about the challenges of the past 15 years and future plans
 MIN RATNA BAJRACHARYA |
Udayan Ganguly: When we first came to Nepal in 1990, India hadn't opened up yet. Nepal was welcoming FDI and provided a very good manufacturing base for export to India with favourable customs and tax rules. There was proximity to the market and a cooperative bureaucracy. 70 per cent of our production is now for export.
How is the domestic market shaping up?
Today, one-fourth of our turnover is within Nepal, and this gives us all the more reason to be here. This is a big advantage because we are not traders. When you provide jobs and add to the local economy, you have a say.
Is marketing a challenge?
The health revolution worldwide and among the middle class in the
subcontinent in the past few years means that any product that is
health-related does well. At Dabur, we have always worked with herbal plants which means we have a readymade market for our consumer health products.
Have you ever regretted your decision to invest in Nepal?
We never came here to be fly-by-night operators. We were very clear from the beginning that we were here to stay, so we have intertwined with the fabric of Nepal through our network of farmer cooperatives. We have set up nurseries and greenhouses and we train farmers in cultivating wild herbs, we help them with microfinance. We have a 92 acre factory in Bara, which has been cited by Tetrapack as one of the world's top seven production facilities in terms of technology and quality for fruit juices.
How difficult have the past 15 years been for business?
The first five years were peaceful, but ironically, since the peace process began in April 2006, things have been more difficult than during the conflict. The last straw was when some activists broke through the main gate of our plant and vandalised the building. It is a pity that the country has to go through this, and we feel a bit shortchanged after doing so much for economic growth. One thing that is keeping us here is our faith and optimism in Nepal's future. But the future is uncertain, and this makes us think twice about future investments.
