March 2006
BIZ NEWS

Nepal Tourism Board (NTB) has unveiled a new brand for Nepal 's tourism marketing.

Developed by India 's marketing consultant Alchemy, the new brand is "Naturally Nepal: Once is not enough".

According to NTB sources, the consultants have advised to launch a campaign spending Rs. 100 million over a period of between six months and one year to get returns from the new brand. The Board has set aside Rs. 25 million budget for this purpose for this fiscal year and plans to raise the rest from the government and other sources..

Earlier, Nepal ’s tourism was being marketed with the slogan " Mt. Everest and more".

The consultants have designed 12 types of print ads and equal number of fliers and posters to be used in the promotional campaign. Also a website is being developed, it is learnt.

The brand was prepared as suggested in a strategic plan prepared with SNV assistance. One of the main points of the plan was to have a specific Nepal brand reflecting the changed times.

In a workshop conducted for this purpose, 174 tourism products were found being sold by Nepal and "Naturally Nepal" was felt suited to represent all these. As above 40 percent of tourists in Nepal were found repeat visitors, "Once is not enough" was felt appropriate to be added to it.

Other alternates considered before zeroing into this brand included "Unbelievable Nepal", " Land of Mountains " and "Spectacular Nepal", say the sources.

The Indian consultant was selected through a global tender after the proposals submitted by Nepali companies were found to be focused more on advertisement than on branding. However, Alchemy has used Nepal 's Business Advantage as its associate in its contract.

Meanwhile, the consultants are finalizing the media execution plan to promote the new brand.

To reach out the tourist originating market, NTB plans to unveil the new brand in the ITB Fair in Germany and then in India within March 2006.

BOK Lending for Clean Energy

Bank of Kathmandu (BOK) has initiated a pilot project to finance electric vehicle in collaboration with Nepal Electric Vehicle Industries (P) Ltd. According to the bank, 20 women drivers in Kathmandu will be provided the loan to own the SAFA tempos. The women clients will also be required to deposit certain amount of their daily earning in a Saving Account in BOK.

Meanwhile, in partnership with Winrock International, BOK has launched a project to provide wholesale loans to local cooperatives to relend it to their members for the construction of bio-gas units.

The bank has also started providing loan to users’ groups of community forests to purchase distillation units to produce herbal and essential oils. 

RBB Shedding Further Fab

State-owned Rastriya Banijya Bank (RBB) is retiring 600 of its 3,360 employees under a compulsory retirement scheme by mid-April.

Meanwhile, the bank is also planning to set up a new branch at Durbarmarg of Kathmandu equipped with modern facilities to compete more effectively with the private sector banks. The approval from the central bank is awaited.

The bank had retired 2,162 employees in the recent past after an international team of professionals was handed over the management to turn the bank around from the verge of bankruptcy. 

Nepali Fear about Indian Budget

The Indian budget 2006 has sent fear waves across the border to Nepal . The crux of the issue here is the additional benefits that the Indian government has provided to the farmers.

The Nepal Rastra Bank is studying the possible repercussions; however, Chief of the Research Department Keshav Acharya says that this budget would further widen the differences in the agricultural sectors of these two economies. While the Indian government is providing the farmers more concessional loans, the challenges in front of the Nepali farmers would be formidable, he asserts.

Moreover, the Indian growth which stands at more than eight per cent is much higher compared to snail pace growth of the Nepali economy that is wobbling at around two percent. With such stark difference between these neighbouring economies several problems would creep into Nepal . While the Indian market is growing as an exciting destination for investment, capital flight is very likely to take place from Nepal to India . Moreover, the provisions of the budget have also been attractive for foreigners to invest in India including investment in the debentures issues by the Indian banks.

This budget has brought out a provision to levy 4% countervailing duty on imports. Though the details about the items on which it is to be applicable is being studied by the exporters, its immediate implications are already evident as reports from major customs points say exports of manufactured goods have stopped immediately after the announcement of new Indian budget

Moreover, the budgetary plan to construct more roads and the reduction of railway fares would enhance trade among different places within India discouraging exports from Nepal into India .

However, vegetable ghee exporters are reportedly happy as the 80 percent duty levied on its imports by the new India budget will affect mainly the imports from Malaysia. But the Nepal’s non-quota export of vegetable ghee to India will be more expensive. 

Fulbari-Blue Flag Contract Broken

Blue Flag International (BFI) which had, in collaboration with America ’s Kosmas Group, taken over the management of Pokhara’s Fulbari Resorts and Spa, has announced that the Resort’s owners have broken the contract and the BFI is going to the court to claim the damages.

According to BFI, the Resort owners had signed a contract with BFI in December and a representative of Kosmas Group had started working in the Resort from February as the General Manager. But when the owner refused to allow the new management to handle the finance, the contract was broken.

The Resort has a huge backlog of payments to make to the tax office as well as suppliers and employees. BFI says, it had initiated process to pay Rs. 21 million as taxes and Rs. 60 million to the suppliers and the employees when Chairman of the Board of the Resort Piyush Bahadur Amatya issued a press advertisement claiming that there was no such agreement.

Banks say they have to collect over Rs. 3 billion from the Resort and all this money is classified as bad debt for which they have to make 100 percent provision. Due to a stay order issued by the court, the banks say they are not in a position to foreclose on the resort’s assets. 

Coca Cola Growth

Following the increase in the demand of its products, Bottlers Nepal is soon increasing the capacity of PET bottling plant in Balaju to 58.45 million litres a year.

It is learnt that this year the company imported 20 thousand cases of the drink in 2-litre PET bottles from India to meet the demand of the Nepali market.

NN Singh, who recently became the Chairman of the company from Managing Director, informed that a new plant with a capacity of 120 PET bottles per minute is being set up. The existing plant has the capacity of 40 PET bottles per minute. The new plant is planned to go operational from June. After that the existing plant will be shifted to Bharatpur to cater to the Terai market.

In addition, there is change in the management structure of the company. With the new provision in place, the company will get only the Country Manager from the head office. Accordingly, Mike Smith is the new Country Manager.