February 2006
CORPORATE FOCUS

Southern Heights Housing with a difference

Attracted by the fast growth in the housing business, Continental Trading Enterprises, long experienced in the construction business and as the dealer of Kia brand vehicles made in Korea, started a new subsidiary Continental Developers. The company is now almost ready to sell premium dwelling units in its colony Southern Heights and located in Upper Harisiddhi.

Though the market is now abuzz with numerous developers who sell different types of dwelling units, Continental has come up with a different business model. While all the other players are following the advance booking method under which the buyers have to make an advance payment for the dwelling unit before its construction starts, Continental has decided to prepare the units first and then sell them.

"By this we assure the customer the comfort of selecting the actual house, not only the design of the house," explains Suhrid Ghimire, President of the Continental Group. The difference is that when a person buys a house through the advance payment mode, there may be several changes in the design and surrounding areas between when it is booked by the customer and when it is actually finished. New houses may be constructed in the surrounding areas, thus wiping away the secluded feel of the initial design and making it a crowded location when it is actually developed. But such disappointment is avoided in Southern Heights as the customer will be buying a readymade house.

The Rs. 270 million project sprawling across 25 ropanis of land has 41 dwelling units with four bed rooms in most of them, fitted with high standard facilities and constructed with an eye on the Bastu. The units are priced between Rs. 4.5 million to Rs. 7.8 million. As the customer do not have to forego the interest cost when buying readymade house, the price is reasonable, Ghimire thinks.

Ghimire says that when his customer enters their new home, they do not need to call the plumbers and carpenters as everything they need will be available-solar water heaters, marble tops in the kitchen, electrical fittings in the rooms. "We have tried to ensure that they do not need to make any significant repair and maintenance expense for at least 10 years," he claims. Moreover, the location has a community hall to accommodate 200 persons and a swimming pool. All the houses are designed by Design Cell, a premium housing designer firm that designed such premium properties as Shangri La Village in Pokhara and Krishna Towers in New Baneshwor. Meanwhile, the company is also planning to launch another housing colony at Jorpati. Named Bhrikuti Colony, the new project is scheduled to be launched during early February.

Besides construction, housing and vehicles and equipment trading, Continental Group is also involved in equipment leasing, bulk transportation, property management and farming. It has partnered with other business houses in export based projects such as sugar and spirit and particle boards from wood waste.

Nepal Insurance young at 59

When Dinesh Poudyalaya came to the Nepal Insurance Company in May 2005 as the new General Manager (CEO) after selection in an open competition, he was walking into a comfort zone. The company's management had just signed an agreement with the workers' union after a prolonged conflict. "It is a good agreement and so far the union has been cooperating with me," he says.

Putting the agreement aside, working with Nepal Insurance should be a good experience. Being the oldest insurance company of the country (established in 1947, i.e. much earlier than the state-owned Rastriya Beema Sansthan), Nepal Insurance has not only more experience and the advantage of being an early starter, it also has a very comfortable reserve to cope with the risks.

In terms of the gross premium collection, Nepal Insurance lags far behind many of its competitors. But Poudyalaya is not worried even though he thinks aviation portfolio is a comfort to have and he is trying for aviation as well. In his view, the premium figure of other companies is high because of their aviation portfolio. Nepal Insurance has no aviation portfolio. But the retention rate in aviation portfolio is very low-about 0.01 to 0.05 per cent, according to him. "Therefore, though our gross premium collection is comparatively lower, it does not affect us that much," he says. The company distributed 40 per cent dividend to its shareholders last year (30 per cent as bonus shares and 10 per cent as cash dividend). Now it has Rs. 102 million as paid up capital.

Being the oldest player in the Nepali insurance market, NIC has been facing typical problems. For example, as Poudyalaya mentions, there is a feeling among the employees that the company is very big, therefore there is no need to draw clients, that they are attracted to the company automatically and that the company can be choosy in retaining clients. Due to this reason, the mentality prevailing is not to make expenses in marketing.

And it is true that the company is able to retain its old clients though these clients have now opened their own insurance companies. "This is the indicator of the trust our company has developed with the clients. Therefore, the company has not been facing a big problem."

But, Poudyalaya thinks that the old mindset has to be changed in view of the growing competition as the other insurance companies have been improving their human resource by employing experienced personalities.

He seems to be also successful in managing the employees. Though they were on a overdue conflcit before he took over his office, there has not been any employee unrest in the company during the period he is in the leadership.

Another change being introduced is in centralising the accounts. "Instead of having nine accountants - one in each branch - we can now have four accountants in the central office who will be able to handle all the accounts, thus saving us the cost," he says. According to him, the policy has already been approved by the board and it will be implemented soon. Similarly, he is planning to outsource the internal audit job as it too will save in costs.

NIC recently has changed its logo. It also decided to shift Dharan Office to much convenient Itahari and have presence in Janakpur as well.