Infrastructure development is a massive market in Nepal
Feroz Mahmud, a Bangladesh national and the Country Manager of Microsoft Bangladesh, also oversees the institution’s operations in Nepal and Bhutan. He was recently in Kathmandu to sign an MoU with the Nepali government to allow Microsoft to work in collaboration with local partners. Excerpts from an interview:
What is your assessment of the Nepali market in terms of heavy machineries?
The construction activities going on here are big opportunities for us. It is noteworthy that despite the ongoing global recession, Asian countries like China, India, Vietnam and Cambodia have been showing promising agility. It is an encouraging prospect for us. All these emerging economies hold a good business prospect for us.
How do you take the competition from other players present in the market such as Caterpillar, Daihatsu and recently, JCB?
I think it is good to have competition. Caterpillar is one of the good companies around and one of our strongest competitors. But in case of Asian countries including India and China, Komatsu is the number one. We have long been providing reliable services in this region. We spend a lot of time with our local customers and distributors to ensure market-oriented products and services.
We don’t believe in product differentiation as such. Working in close coordination with a strong local distributor makes all the difference. For example, Caterpillar is the best among the local distributors in the U.S.A., mostly because it is their home ground. Their closest ties with the local customers make it difficult for us to compete with them. But their market share is shrinking in the U.S.A. and Europe due to the ongoing recession, which has stalled development projects. Being a Japanese company, we share an amicable market relationship with the fellow Asian countries, which are growing despite the onslaught of the recession. Our market share is, in fact, improving.
Is there any strategic difference between Eastern and Western markets in terms of the demand for heavy equipments?
Fundamentally, there is no big difference in terms of customer behavior. But there are some fundamental industrial differences. In Asia, especially in Malaysia and Indonesia, there are lots of logging industries, so the demand for logging equipments is high there. Talking about customers for mining equipments, their preferences are probably the same across countries. Most of the big mines in the world are operated by Australian and American companies who prefer similar equipments.
However, Nepal has its own unique requirement due to equipments having to operate at high altitudes, similar to Chile. In both these countries, we need to ensure supplementary air compression to keep engines at work. We have some specific features in equipments operational in Nepal and Chile.
Apart from real-estate, what other potential sectors are you looking into?
Infrastructure development is a massive market. Cement and brick industries are other big prospects. Our equipments are suitable for urban development, small and big irrigation projects and utility functions.
What is the growth plan of Komatsu in Nepal?
It is difficult to declare right now. I have been following news on political developments in Nepal. So it would be too early for me to give details concerning our growth plans. Our market share had grown by 3 per cent last year and I believe it will further improve this year.
Nepal is Fortunate for its Association with Microsoft’’
Feroz Mahmud, a Bangladesh national and the Country Manager of Microsoft Bangladesh, also oversees the institution’s operations in Nepal and Bhutan. He was recently in Kathmandu to sign an MoU with the Nepali government to allow Microsoft to work in collaboration with local partners. Excerpts from an interview:
What brings you to Nepal?
I am here basically to sign on behalf of Microsoft a Memorandum of Understanding with the government of Nepal for jointly developing and promoting Information Communication Technology (ICT) in Nepal.
What does Microsoft plan to offer to the Government of Nepal?
We need to understand government priorities at first. We can then determine areas where we can lend our support – sharing experiences, providing consultancy services or offering products. We can effectively link academic institutions in Nepal together by brining students under a common technological platform. We have some of the best academic and technical courses available for the Nepali students. We envision to prepare them for the real market through essential updates and effective guidelines, trainings and orientations. We believe that upon receiving our trainings and guidelines, Nepali students will be able to compete in the most demanding markets like the USA, Singapore and the UK.
We can help the Government of Nepal in its e-government projects. We have been doing the same in many countries around the world. It is not that we are here just to sell our products. We are here to build a collaborative network with the government to transfer our exposure, skills and experiences to the relative fields and sectors in Nepal. We have all the necessary resources and programs. For example, we have a program called MSDNAA (Microsoft Development Network Academic Alliance) for universities. Through this program, universities will acquire Microsoft curriculum which they can include in their regular curriculum. Through this alliance, students will get to learn about the latest technologies and job markets. We know about market demand and we know how to prepare students for some of the best jobs in the world. This is how we plan to work with various government programs.
We have been hearing so much about Information and Communication Technology (ICT) in Nepal for the last few years but nothing significant progress has been reported. What do you think is the major stumbling block?
To be honest, Bangladesh, Nepal, Sri Lanka and Bhutan share an identical problem – government apathy. But the Bangladeshi government has recently gone a bit ahead. It declared its intent to digitalize all the sectors to ensure transparency through the use of technology. It further intends to turn Bangladesh into a knowledge-based nation. The association between government and people, between businesses and businesses and between businesses and customers is aimed to be made systematic through the effective implementation of ICT. The Nepali government needs to take similar initiatives. The government should further create an investment-friendly environment to attract private players in the IT sector.
Microsoft must have signed similar MoU with the government of Bangladesh. How is Bangladesh benefiting from the agreement?
Nepal is fortunate in this context. Though Microsoft has an official presence in Bangladesh, we haven’t signed such an MoU with the government there. Another interesting aspect is that we still don’t have Windows XP and Office Package in our native language (Bangla) but Nepal already has it in Nepali. We are trying to do what is best for Nepal and it doesn’t matter whether we are physically present here or not. People living in cities don’t feel the necessity of using operating systems in local language but it is extremely important for people living in villages who don’t feel comfortable with English and other languages. The underlying idea is that everyone should have access to technology and it should not be limited to the affluent class only.
What does Microsoft intend to get from this association with the Nepali government?
We will be getting educated customers. Once customers are educated about products, they will use our products effectively. This will not only help the business of Microsoft to grow here but the entire information technology industry.
What made Microsoft interested in Nepal?
Nepali young generation is tech-savvy and that is one reason. If this association works out well, we will deliver much more than Microsoft Office Packages and Windows XP. But for the IT industry to boom in Nepal, there needs to be uninterrupted supply of electricity, high speed connection and enough quality manpower and an investment-friendly environment.
We plan to sell 1000 cars this year’’
Atul Kumar Dhagat, Head – International Business, Passenger Car Business Unit of India’s Tata Motors Ltd. was in Kathmandu to launch Indica Vista, a new model of car from Tata. Excerpts from a brief interview:
What does your tagline ‘changes everything’ imply?
To answer that question, I would like to offer you a brief account of how we started our journey into passenger cars. In 1999, we launched our first passenger car – Indica V2. Over time, we have introduced a lot of variants of Indica. On Indica platform, we have had Indigo as sedan (Indigo Station). We have brought out Indica in both diesel and petrol versions. Indica Vista is a new generation of Indica and there is everything new in it. This is why we have tagged it ‘changes everything’.
It has a new body. It has an absolutely new style which is very contemporary, European and stylish. The interiors are totally different as we have taken the control to the centre. The engine and gearbox are supplied by one of our sister companies. We have a joint venture company in India with Italian automobiles major Fiat that manufactures and supplies engines to both Tata and Fiat. We have a new power pack in this model. We have also improved the length and the width of it that now offers more leg room and comfort to passengers.
Going by the global trend, compact cars seem to be the in-thing with Nano as the model. But you have made Indica Vista even bigger than earlier version. Why?
I’d like to answer this question with two explanations. First, we have only slightly increased the length and width of the car to ensure enough leg room for passengers. Second, we also have Tata Nano in our arsenal now to cater to the small car segment. Indica Vista is our brand new innovation that measures three meters. Tata Nano is an innovation in its own segment but we have to have our focus on other segments as well.
When can we expect Nano to hit the Nepali market?
Nano has garnered a lot of interest across the globe. But please understand that we are going to start its delivery in India from July onwards only. We would like to fulfil the Indian demand first before venturing out to international markets, including Nepal. It is sort of premature for me to say when exactly we are going to launch Nano in Nepal. However, we would definitely like to bring it to Nepal.
Do you find Nepali market suitable enough for diesel cars?
Diesel cars could be a respite for Nepali commuters in the face of frequent obstruction in petroleum supplies. Mileage is good too. Our vehicles have highest mileage in their respective segments – about 23 kilometres per litre. We need high-mileage vehicles here. Also the European countries like Germany give certain incentive to diesel cars that give highest mileage.
In Europe, petrol engines are catching up with diesel engines. In that context, how feasible is it to launch a diesel car which is generally expensive as compared to a petrol car, in Nepal?
Europe is actually moving towards alternate fuel. The Liquid Petroleum Gas (LPG) and Compressed Natural Gas (CNG) are now getting very popular in Europe. It is very easy to convert petrol engines into automatic LPG or CNG engines. That is why in last two years, gasoline-powered cars have become more popular.
What is your sales projection for Indica Vista in the Nepali market?
We are going to be in the same ‘B’ segment as far as cars are concerned. We don’t have products for the lower segment right now. We have to wait for the new cars to arrive to fit into that segment. We will continue to compete with some of the existing Korean manufacturers, Maruti and other players in the segment. We will be in the same place with a widening range. We are going to cater to newer applications, newer segments and newer customers. In that sense, we are definitely going to increase our market share in cars. We will continue to be dominant in the utility, multi-utility and sports utility vehicles.
Can you give the numbers?
This year we should be touching four-figure mark – about thousand vehicles putting together all our brands that are sold here.
Who are your target customers?
We are definitely looking at professionals, like doctors, advocates and professors. In our initial study that we carried out for this particular brand, the potential customers that we came to acknowledge are middle to upper-middle class.
Are you planning for some exclusive marketing activities for this particular brand?
Of course, we are. In fact, segment specific and profession specific demos, test drives and campaigns have been planned. We are planning to give demos to doctors, professors and government employees as this segment of car is manufactured keeping in mind the slightly affluent middle class. This is a premium ‘B’ segment car which is why its target audience have been chosen so, who can spend that kind of money and purchase this car. Thus, we have planned marketing activities that are target specific.
Are there any plans for exchange facilities?
Right now, we haven’t provided exchange facility but we are trying to tie up with dealers who are involved in second-hand cars. Sipradi can’t deal in second-hand cars because when we buy a second-hand car, revise it and sell it, we again have to pay 30 percent VAT. That way, it is not viable for us but if that hassle is removed or the VAT rate is lowered, we can do it. For this, we are lobbying with the government. In India, there is a special VAT rate for the second-hand car dealers. Hopefully, there will be something included in the upcoming budget in this regard.
