April 2005
BIZNEWS

Beacon of hope for Nepali MICE

Meetings, Incentives, Conventions and Exhibition (MICE) tourism of Nepal has found hope for its revival after the National Suisse Assurances of Belgium recently started promoting Nepal under their staff motivation programme.

According to the programme, eighty sales agents of the company selected through a competitive process will be awarded a week’s adventure holiday in Nepal in March 2006.

Belgian incentive operator “In Search of Excellence” has landed the contract to make the travel arrangements for the winner sales agents of the National Suisse Assurance. Marcopolo Travels (P) Ltd. has been selected as the local operator, according to Nepal Incentive and Convention Association (NICA).

NICA expects this development to trigger a revival in Nepal’s tourism hard hit by the exaggerated negative international publicity about the country.

According to NICA, other inquiries are also pouring in for similar packages from various parties after the Royal Proclamation of February 1, 2005 that helped improve the security situation in the country.

Last Decade Saw Triple Jump in Scientist Population

Nepal's population of scientists and technologists increased more than three times during the 1995-2005 decade, according to reports quoting Royal Nepal Academy of Science and Technology (RONAST).

Accordingly, Nepal now has about 26,000 persons in a pool of such human resource while the number was only 8,000 in 1995.

The breakdown of the existing scientist and technologist population is 2,600 in agriculture, 10,000 in engineering, 5,100 in medicines, 4,500 in physics and chemistry, 2,000 in biology, 800 in forestry and about 1,000 in the others.

State-owned Feed Factory Careworn

The wholly government-owned animal feed factory located at Hetauda is on the brink of collapse due to the lack of timely maintenance, corruption and irregularities.

The 3,700 MT capacity factory has not been able to meet the market demand, as one of its two feed processing machines has been out of order for years. Also the building and other facilities are in a dilapidated condition due to the lack of timely maintenance. As a result, the annual turnover of the factory is Rs. 20 million only.

According to Bishwa Bir Shrestha, Quality Control Officer of the factory, the production has gone down drastically due to the lack of capital, late payment or no payment by the government-run farms and obsolete machinery. Though there is demand for various types of feed in the market, the factory has only been producing powder feed and bone meal. Therefore, the farmers have to depend solely on the privately-run feed factories.

Established under the Carcass Utilisation Programme and Cattle Feed Plant in 2027 B.S., it is being run under the Livestock Feed Production Development Committee of the Ministry of Agriculture and Co-operatives since 2041 B.S.

“Transport facility to carry the product to the market centres, sufficient working capital, hiring skilled manpower and installing new machines to produce poultry feed can bring the factory out of this grave stage,” says Shrestha. If ever the objectives behind the setting up of this factory are to be achieved, this factory, which still sees a turnover of about Rs. 20 million, is awaiting prompt actions from the government before it completely fails.

Narayani Transport barred from Rotation System

To the relief of the manufacturers and traders, the Transport Management Committee, Birganj has ordered Narayani Transport Operators’ Association to stop the rotation system while operating the public transport services. As a result, the transport business has become competitive.

The Makwanpur Chamber of Commerce and Industry (MCCI), which was demanding abolition of the rotation system arguing that such a system was against the clause 168 of the Vehicle and Transportation Management Act, 2049, was jubilant following the order by the Committee.

In a press meet organised by MCCI following the decision, the president of the chamber Uttam Sharma Dhakal, recalled that the rotation system had been hampering the competitiveness of the businesses in the region. He also warned the transport operators not to resort to any other tactics to revive their anti-competitive methods in any form.

By Ram Mani Dahal from Hetauda

Tourist Arrivals 35 percent Down in March

Nepal received 20,137 tourists in March 2005 recording a 35 percent decrease compared to the same month last year, though the figure was 6,136 higher than in February 2004, states the Nepal Tourism Board analysing immigration figures.

Across the market segments, British, Australian and Chinese markets registered 13 percent, two percent and one percent increase over the same month last year while in the case of German, Dutch and Spanish markets there were marginal declines. However, there was sharp decline in arrivals from US (39 percent), Japan (50 percent), France (49 percent) and Australia (56 percent).

Despite this, NTB hopes for a revival in the arrivals this summer due to its various promotional efforts recently in Bangladesh and India.

Briefs

l The government has published a notice to privatise Birganj Sugar Factory by the sale of assets. The properties put up for sale are the sugar mill, the distillery, the buildings and the 26.1 bigha land within the factory compound.

Meanwhile, it has also invited expression of interest from the private sector to privatise the Nepal Ropeway that has infrastructure connecting Hetauda with Kathmandu.

l The government has reverted back to a six-day working week with 10 A.M. to 5 P.M. as working hours also in Kathmandu beginning mid-April from when also Sunday will be a working day. This will bring uniformity in the normal working hours in government offices across the country. Private sector, particularly the banks, follow the government while fixing their working days and hours.

l The government has dissolved the Ministry of Population and Environment. Now the population management affairs will be under the purview of the Ministry of Health while environment matters will be under the Ministry of Science and Technology.

l The World Bank has shortlisted 40 proposals for the Nepal Development Marketplace (NDM) scheduled to be held on May 13. Out of the shortlisted proposals, 20 will be awarded grants for implementation after the detailed proposals are evaluated in the May 13 national competition in the NDM. The shortlisted proposals are related to diverse fields ranging from micro-enterprise and alternate source of energy to different agro-businesses, public health, skill training, Dalit empowerment and rural infrastructure. Most of the proposals are from NGOs, though one prominent corporate body, Salt Trading Corporation Ltd., is also selected for its proposal on Pot-in-Pot Evaporative Cooling Technology. Altogether 1,037 proposals were received for the contest.

Corporate Kaleidoscope

l State-owned Agriculture Development Bank is being converted into a company with a plan to induct private sector shareholders in it.

l Chaudhary Group, a conglomerate of over 40 industrial and commercial enterprises, celebrated its 135th anniversary in March.

l Prudential Merchant Banking and Finance Ltd. has changed its name to Prudential Bittiya Sansthan Ltd.

l Everest Bank Ltd. has opened a new branch in Pokhara increasing the number of its branches in the country to 16.

l Nepal Credit and Commerce Bank Ltd. has opened a branch in Birtamod, increasing its total number of branches to 15.

l DHL Nepal (P) Ltd. has changed its name to DHL Express Nepal (P) Ltd.

Corporate Scorecard

Lalitpur Finance Co. Ltd. concluded its 8 th AGM without declaring dividend to shareholders but promising to pay reasonable return in the next fiscal year. During the fiscal year 2003-04, the company earned a net profit after tax of Rs. 5.59 million, as compared to Rs. 9.55 million in the same period in previous fiscal year 2002-03. A hefty rise in the loan loss provision, increase in operating expenses, employee expenses and interest expenses caused the profit to decrease. The company had a good earning per share (EPS) during FY 1996-97 - FY 2000-01 and it was in the increasing trend but after that, it has been decreasing continuously.

The company has retained all of its profits in the recent years, enhancing its internal strength as shown by the increasing book value per share (BVPS).

Nepal Industrial and Commercial Bank (NICB) concluded its 7 th AGM recently. In the fiscal year 2003-04, the company earned a net profit after tax of Rs. 68.36 million which was a 163% increase over the previous fiscal year 2002-03. The bank has retained all its profit of the year to meet the paid up capital requirement fixed by NRB. The company’s board has expected to distribute stock dividend in the future by capitalizing the retained profit.

The substantial increase in the net profit of the bank is due to reduction in operating expenses, non-operating expenses, exchange rate fluctuation loss, loan loss provision etc. while there was 24% increase in interest income almost 100% increase in commission and discount income and more than 100% increase in other income.

Nepal Housing Development and Finance Company (NHDFC) Ltd. and Capital Merchant BankingandFinance (CMBF) Ltd. held their AGMs for the fiscal year 2003-04 recently. These companies earned Rs. 22.12 million and Rs. 9.85 million net profit respectively for the fiscal year 2003-04. NHDFC has approved 18% cash dividend to the shareholders whereas CMBF retained 100% of its profit.