Premium housing colonies in Nepal will showcase Kohler’’
Sharad Mathur, Managing Director, Kohler India Corporation Pvt. Ltd., was in Kathmandu to launch Kohler brand of bathroom products in Nepal. At the sidelines of the inauguration of the 5,000 sq. ft. Kohler showroom at New Baneshwore, Mathur shared more information about Kohler products and his impression of the Nepali market. Excerpts from an interview:
How successful has been your Nepal visit?
I think the visit has been fruitful as we have managed to do a lot in the first day itself. US Ambassador to Nepal Nancy Powell graciously inaugurated the Kohler showroom endorsing Kohler as an American brand. We are trying to sign memorandum of understanding with two large developers – Lifestyle Housing and Shangri-La Housing – and efforts are underway to forge similar deals with more developers. I hope the business is going to be good for us and for our clients here. With Shangri-La Housing being a seventeen-storey project, probably one of the biggest in Kathmandu, we are joyous to see our products showcased at such a premium and large-scale development project.
What are your growth expectations from a miniscule market like Nepal?
We conducted a research about the configuration of Nepali market before venturing into it – like what sort of products and strategies that work out here, its water-pressure conditions and plumbing system. Fortunately for Kohler, we have 50 manufacturing locations across the world. We cater to so many countries that we always have matching configurations for respective regions. We had a workable configuration for Nepal which we have launched. From the water-pressure standpoint, we have products aimed at Indian Subcontinent taking care of the pressurised water supply that is common in this part of the world. So, all our plumbing products operate on overhead tanks. You might wonder how a person can have a good shower in case of low or uncontrolled water pressure. For this, we have unique showering engines that provide consumers both ease and great experience.
What is your growth forecast for Kohler in the current year here?
Normally we don’t put numbers to this sort of questions. It is important to do the groundwork first, which means understanding the basic consumer preferences. We need to make sure that we have a passionate partner who puts up a good exclusive showroom to provide consumers a good buying experience. These things are basic. Then in case of a new market, we begin working with interior designers and architects. They are the ones who build or certify premium housing. Lush apartments and villas always need help of expert interior designers. So we start working with the professional community. These are the people who should know about our products and the showroom. Then we work with hospitality sectors like hotels. If the groundwork is carried out well then there will be no reason for us not being successful.
Who are your target customers? Upscale ones?
Not necessarily. Fundamentally, our objective is not to be upscale-oriented only. We are not a niche company. We cater to both middle and upper class with our diverse product range. Even a normal Nepali consumer can afford to buy from a couple of product ranges. So as our plants in India start getting commissioned, we will be coming out with more affordable product ranges. Moreover, the products will come cheaper for customers who have been using products imported from countries like Thailand and Singapore.
Your products operate with the help of electricity but Nepal right now is going through an acute shortage of electricity. How are you addressing this concern?
There are some products that need power supply, like showering products. The rest don’t need electricity to operate. But you should know Kohler as a company is also into power back up systems and power generation systems. We recently launched some of these products in Nepal and Global Power is our authorised distributor, which has already sold more than 150 Kohler generators.
"Industrial dishwashing products have high potential in Nepal’’
Sergio Bono, Business Development Director of EUROTEC Group, an Italian manufacturer of industrial dishwashing machines was recently in Kathmandu to launch IFB dishwashers in Nepal. He shared more about the company, their alliance with IFB of India and the distinguishing features of the launched product. Excerpts:
Can you brief us about EUROTEC Group and its business relationship with IFB?
We are an Italian group specialised in manufacturing industrial dishwashing machines, cooking ranges and refrigerators that are needed in hotels, hospitals, army institutions, colleges and so on. We started business with IFB about three years ago which is an manufacturer of home appliances. They have now diversified into professional equipments. They introduced me to Sagtani Exim Pvt. Ltd. two years ago which is the sole importer of IFB brands in Nepal. From last year, Sagtani started to import industrial dishwashing machines from IFB targeted at hotels and restaurants in Nepal. We manufacture these machines in Italy but they are sold in India and Nepal under IFB flagship. We are going to introduce our cooking ranges in the Nepali market which we haven’t yet introduced even in India. This is because IFB hasn’t been getting aggressive about the cooking ranges in India due to its strategic reasons whereas Sagtani believes there is a potential market for these appliances in Nepal.
What is your role as a Business Development Officer in EUROTEC Group?
EUROTEC is a company selling its products in more than 60 countries. We have more than 600 distributors all over the world for our various brands and products. My role is to develop the business of EUROTEC in the untried developing countries. I started with India, went to Taiwan and then to South East Asia. This time we are promoting our business in Nepal. It looks like we have already done some good business here and prospects seem promising. Our existing and prospective client list includes hotels, restaurants, monasteries, colleges, hospitals, army institutions, factory canteens, coffee shops, bars and nightclubs and any other place where people come to sit, drink and eat.
What is your impression of the Nepali market with regards to the products that you have launched and plan to launch here?
What we have seen is that five star hotels are already equipped with modern equipments but they have grown old now. Some need to be repaired while others need to be replaced and in some other cases, more equipment needs to be added. So, I would say that hotels are best equipped at the moment. Restaurants are not yet well equipped and so is the case with other eating and drinking joints. Sagtani has already sold a good number of our professional dishwashers to restaurants, hotels and catering companies.
What is the unique selling proposition of your dishwashers?
The most important benefit is that a user can save water, detergent and time. Quicker operation with zero breakage and chipping of dishes and glasses is our competitive edge. The utility of our offerings also depend upon the size of the business and for that we have different sizes available.
Moreover, we give standard warranty of 12 months on the spare parts. Sagtani is responsible to give support to the customers on warranty features. They have all the required spare parts and trained mechanics with them. We also have a full time engineer based in India to solve the technical problems beyond the grasp of these mechanics. This is to ensure quick service to our customers since we can’t wait for any help to come from Italy. We have been receiving encouraging feedbacks from the Nepali customers as their previous suppliers couldn’t ensure them quick and reliable after-sales services.
Have you made your products affordable to the Nepali market as a whole?
The price of the dishwashing machine starts from Rs 150 thousands. It might sound expensive but if you understand how your investment is going to give you good returns, you will come to believe that our machines are priced reasonably. We started selling our products here about 24 months ago. Initially, we too used to wonder whether we had potential customers in this part of the world or not. But we have sold 600 machines in the last 24 months only in India. In fact, Nepal has picked up faster than any of the states in India. Perhaps it is because Sagtani Group has caught the nerve of the market.
What are some operational features of your equipments?
Our equipment uses 1.7 to 3 litres of water to wash a basket of dishes comprising of 18 plates or 25 glasses as compared to 8-10 litres used in manual dishwashing. When you are using less fresh water, you are throwing out less dirty water. This way our equipment is also minimising pollution. The power consumption depends upon the size of the machine. There are machines consuming 2-3 KW per hour if the boiler is working all the time. But they are all thermostatically controlled. So it is only a matter of maintaining the temperature through the use of a switch.
What is the business scale of EUROTEC?
EUROTEC has an annual turnover of 150 USD from operation in more than 60 countries. We simply produce and sell to our distributors; we don’t sell directly to the customers.
How is the hygienic aspect of these machines?
Yes, it is a dish sanitizing machine. However, it doesn’t sterilize the dishes because to sterilize, dishes need to be steamed which isn’t possible using any kind of commercial and household equipments. Nevertheless, these machines wash dishes at 50-55 degree Celsius and rinse them at 80-85 degree Celsius, which means harmful bacteria are killed by the heat during the washing process. If you do it manually (using hands), the maximum temperature you can produce is 40 degree Celsius.
Nepalis prefer whiskey’’
Kaushik Chatterjee, Executive Vice-President and COO, United Spirits Ltd. India was in Kathmandu in his routine visit to inspect the performance of their recently launched premium whisky brand Antiquity and other products and to attend the regular board meeting. Excerpts from a brief interview:
What’s the major difference that you find in liquor industry between India and Nepal?
Being a bigger country with bigger population, consumption level naturally is much higher in India. It varies from market to market – like in India, high consumption level is in the southern states, while it’s lesser in the eastern parts and in the central states. Whiskey is the predominant business with rum being the follow up with an impressive market share. In Nepal, whiskey has always been dominant while rum is not that popular among consumers. In gin category, white spirit is big here and BR Gin is the leading brand. White spirit is doing well in India as well.
You mostly seem to be catering to the premium segment. What about low and medium segments?
We aren’t into lower segment for the time being but we intend to get into it in the near future. We will be launching a couple more premium brands and then we will decide whether to bring something at the bottom range. The fact is that the price of molasses has gone high, which has made it difficult for us to produce cheaper brands. We don’t see business viability in it right now. If the price of molasses goes down, we will certainly consider about the lower segment as well.
But some middle-range brands are doing quite well in the Nepali market, aren’t they?
We will come back in that segment once the molasses price stabilises.
Your whiskey segment is quite strong as compared gin and rum. What you think are the reasons behind it?
BR Gin is the number one here. Celebration Rum couldn’t do well because rum segment is small here – it’s not so massive as in West Bengal of India. Whiskey is the predominant business here. We will come back with Celebration Rum in a much bigger way, the way we have come back with McDowell’s No.1 and Signature at present. Antiquity is doing very well. We need to understand how well is well. That’s our quest. We have to observe the market before launching our products. We already have a good range of brands on the shelves here and if we manage to grow big in a couple of years, we will add up some more. We can’t concentrate on multiple brands at the present moment.
So what’s your impression of the Nepali consumers in terms of liquor consumption?
Well, I think that in today’s world, Nepal is pretty dominant. Nepalis are big spenders and they live life fulltime. They party hard so our business is good.
Are you planning to support Nepali cricket team as we hear?
We are into cricket. We supported the Royal Challengers during Indian Premier League (IPL) last year. We are looking into whether cricket is popular here or not. We have supported a couple of Nepali football teams as dominant sponsors. We are looking into cricket as well. Let’s see. It has to be a win-win situation. Only backing is not the answer – we have to get the both sides of the story. We are into consideration phase. We are into talks with the Nepali cricket board and we have been waiting how they translate this whole thing into a business-like model.
What are your other plans?
If you look at it, Antiquity will have its market very shortly. It has just been launched but the buzz is all around. We will bring one more premium brand of Antiquity soon because as we see, people here will love to have another good product. We are also looking at international business. We will shortly come back with Whyte and Mackay range – single malt and scotch. I think that will also be popular here as single malt is the fast growing segment in the world.
"Nepal can export its ecological expertise to India’’
Sanjeev Sanyal, Senior Fellow at WWF-India, used to be a financial economist for Deutsche Bank Asia. He quit his job to concentrate more on environmental issues. He has his own NGO called Green Indian State Trust and more recently, he has set up an institution called Sustainable Planet Institute in Delhi, India. He was in Kathmandu to share his thoughts with young Nepali business executives in an interaction program organized by WWF-Nepal. Excerpts from a brief interview:
How do you perceive the current situation of environmental issues mixing up with economic issues?
I think we need to understand this from the perspective of what happened in the financial market. The financial and ecological crises that we are experiencing are actually linked. The financial crisis was the result of misallocating financial capital over many years and it’s not as if we didn’t know this would happen. We knew for example for years that the American consumers were taking too much debt. We knew that lot of this debt was put on houses, and a lot of that was given to people without income and assets, which would eventually go bust. But banks kept lending and consumers kept taking the loans. So eventually we had a debt crisis.
We are actually doing the same with environment. We are taking a huge ecological debt against Mother Nature. It is similar to the financial crisis – we have known for at least two decades that human civilization is living beyond the capacity of the Earth to regenerate itself. We are living beyond our means and we will end up having an ecological debt crisis. But it is more dangerous than the financial crisis. If the global climatic system or the ecological system begins behaving like the share price of General Motors or City Bank, you can just imagine the situation that will unfold. It’s human failing. As human beings, we failed to judge long-term risks. We were unable to judge the risk of the major financial collapse despite knowing all the facts about it.
In case of a developing country like Nepal, how do you perceive the relationship between environmental management and development?
I think the idea of trade-off between development and ecology is complete rubbish. There is no trade-off between having a good financial management and sustainability. When we are trying to restrict the so-called development by putting environmental restrictions, we are talking about making sure that water supply remains, forests remain and so on. But who uses these forests? Eventually, the poorest people in the world. They depend on forests for non-timber forest resources. They depend on natural ecological system for their water supplies.The rich can drink boiled water; it’s the poor who will be forced to drink polluted water. So, to say that some sort of development is happening because we are creating gigantic industries that are polluting is actually not the right way to think about this. In fact, we are recognizing this in many ways. Other countries had to make the mistakes and then had to undo it. But you have an opportunity of doing it in a sensible way.
Now, if we begin to build the American suburb-based cities like Atlanta, it will be an unsustainable city. Again, if you build a city like Dubai, that’s again unsustainable. To create cities like Atlanta and Dubai and then to retrofit them later is clearly stupid. Why not begin to build cities which are designed for the future. We already know that automobiles, the way we think about them, will soon cease to exist. So why don’t we design cities for walkability, for public transport? If you hardwire walkability and public transport, you can build completely different cities. Let me give you the example of Barcelona in Spain. It is one of the most beautiful cities in the world. Yet it has an ecological footprint which is one-fourth of Atlanta. And nobody can claim to me that this is a compromise of standard of living because Barcelona has one of the highest standard of living in the world, higher than Atlanta and Dubai.
How does an environmentalist define development then? What about increasing food production so as to feed the poor, building dams, public housings and things like that?
I think it’s not so much about what we do but how we do it. I am not just an environmental activist. I am an economist. I have spent most of my career working in financial markets, in a bank and frankly I don’t see any contradiction in it because, in my view, both these aspects are about allocating resources efficiently. There is no trade-off at all. I think it’s a matter of imagination to be able to see a little bit ahead. All you need to do is go out and have a look around you, like melting glaciers in Nepal.
There is no doubt that Nepal is not contributing that much in the melting of its glaciers. Still, this is a global problem and you may be part of the answer. There may be an opportunity here for you to do something rather than going down the same irreversible track. For example, instead of thinking about the model of urbanisation that would be sustainable is completely different from the one that you are currently emulating. It’s about how you design your cities, whether you are living in houses or apartments. An apartment consumes about 47 percent less energy as compared to the same capacity stand-alone house.
People living in apartment blocks are more than likely to have created dense cities. And dense cities have the advantage that you can use public transport or simply walk. Unfortunately, we ignore walking as a way for getting from one point to another. Take example of the Indian city of Gurgaon. More money has been invested in this city in the last decade than in Singapore. It’s a brand new city but it doesn’t have even 50 meters of decent footpaths. Now what happens as a result of this is that people are essentially forced to use cars. Even if you retrofit public transport these now, it won’t work efficiently because no matter what form of public transport you introduce, eventually the last mile has to be walked. That’s the whole point. So you can create good bus systems but if you can’t walk from where you get off at the bus stop to your home, you will not use the bus.
So what could be the development alternatives for poorer countries like ours in the thick of environmental issues?
It’s eventually about management. This requires both business and the government to come to an understanding to promulgate the vision for New Nepal. You have an opportunity here as you are writing a new constitution. You can actually intertwine sustainability into your constitution by chalking out rules and regulations for sustainable development processes – like in case of town planning and urbanisation. It doesn’t mean that you have to stop the development process because urbanisation in some form or other is inevitable. It need not to be a bad thing. In fact, dense cities tend to be more sustainable than spread out sprawl-like cities. So if you design for it, prepare for it and you recognise that there should be changes and if you accommodate them, then I think you have the chance of actually creating an attractive 'New Nepal'. You can think about alternatives and as a matter of fact, there are plenty of alternatives for a small country like yours. New Zealand is one good example. Take Switzerland as another example.
What do you think will be the future course of development? Will the developed countries undo their now proven unsustainable practices or will this whole matter be limited within corporate social responsibility of some rich organisations?
I think the whole issue has now gone beyond corporate social responsibility. It is going to be a big business now and we are beginning to see that already. In America alone, under Obama administration, hundreds of billions of dollars are being spent on green efforts. But I think that will just be the beginning simply because the whole dynamics will change to force you to do it. Each problem holds an equal opportunity for business to think about the alternatives. One major area that you need to think about is urbanisation and there is a huge opportunity in it in terms of designs and all. And in fact if you get it right, you may actually be able to export it to other countries.
How can we translate this whole thing into a sustainable business then?
We have limited energy and natural resource. Now we are simply going to run out of some of these. So managing the remaining resources is the name of the game and just like in the IT revolution in the 80s, we are in the same position today with green technology. We can see a lot of changes happening. Many of these changes have not yet matured but we can see huge innovation happening in water and solar and other forms of energy. So, what exactly will happen I don’t know but that’s what businesses do – take risks.
Do you find carbon trading feasible in case of Nepal?
Some form of carbon trading is probably going to happen. However, you need to remember that this current global environmental system is going to have to be revisited. I think the Kyoto Protocol is going to be revisited. We need to see what happens out of that but I would say that Nepal shouldn’t be sitting around waiting for that. It’s in its own interest to begin to adapt to the new world. So far Nepal continues to have a fairly sound ecological system. You need to think innovatively what kind of industries you need to encourage. Simply encouraging heavy industries for the sake of industrialisation may not be a good idea. Why do you want to compete with India and China? What you need to create is interesting niches and use them in the market.
What sectors do you think have the scope for such niches?
One major area is to look at the architecture of constructing cities in areas that are hilly and tectonically unstable. It’s an important area where there is less research being done in this part of the world. You can specialise in it. I am not just talking about constructing buildings – it can be about hydraulic system, drainage or waste management system. By the way, all of India is vastly behind in this field and if you can specialise into this particular area alone, there is a huge benefit because from Kashmir to Nagaland, India just has hilly areas. From Indian perspective, it might not be worthwhile to invest in this but it can be a great market for you.
