June 2005
SME Focus

Mateshwori Enterprises: Growing with Colours

Established in a narrow lane about two years ago to deal in construction material, this wholesale and retail firm has now specialised in what the owners call “clean stuff” and shifted the shop location to posh Shantinagar. What is in store for the future?

They started with a small investment. Sanjay Rawat and Bidur Kafle had jumped into business together leaving their professional career in marketing and accounting respectively by opening a wholesale cum retail store for construction material in a narrow lane in Shankhamul. As their clientele soon expanded to places such as Milan Chowk to Koteshwor and Kalanki, they needed to expand further by making additional investment and by moving to a more easily approach-able location. So they inducted a new partner, Yeswin Sharma, and recently moved shop to Shantinagar, with plans to diversify their trade.

Their dream is coming true with the acquisition of the dealership of Asian Paints, the largest selling brand of paints in Nepal.

How the trio came together is an interesting coincidence. Well educated and young, all three come from families who traditionally joined administrative services. Rawat and Kafle were strangers until they met in Shankhmul. Rawat was brought up in Dehradoon, India and Kafle comes from Syangja district in western Nepal.

They quit their well paying jobs (Rawat, an MBA and experienced in the marketing of construction material and Kafle a bachelor degree holder in management and experienced in accounting) and started trading in construction materials. They believed that they had the energy and expertise to do something on their own. They made an initial investment of about 0.5 million rupees and mainly sold cement and steel bars along with sanitary items, door fittings and some brands of paints.

Though they were not making huge profits, they were constantly learning and moulding their business. As they did not find cement and steel bars clean enough to deal with, they started focusing on other cleaner construction items– bathroom fittings and paints. As a result, the transaction volume reduced but the profit amount was maintained.

The housing construction business is perceived to be not much affected by the conflict in the nation compared to the other businesses, but as there are about 500 similar shops in Kathmandu, their business is not as easy as it seems. But with the increase in the number of Mateshwori Enterprises’ clients and their constant approach to grow, they were able to explore their potential. As they did not come from business families, their weak side was always the ‘money’. It was then that Yeswin (a relative of Kafle who bears similar qualities—educated, young and from a service class family—like the other two) joined the business that they were able to invest about one million rupees as additional capital. Relocating the shop to Shantinagar was not just to reach out to major clients. They also had the plans for the diversification of their business and they wanted to make their name by providing quality.

This was made easier when they obtained the dealership of Asian Paints, a premium brand in paints. “Though we get lower margins from the sale of Asian Paints, it is made up by the pride of selling a quality product,” says Rawat. “Moreover, a buyer who comes to us to buy an Asian Paint product will normally buy a few other items as well. Thus, this tie up has given us more strength,” adds Kafle.

According to Kafle, acquiring the dealership for Asian Paints was a strategic move and they faced some tough times to obtain it. “The tough part was arranging the finance, but it was made easier when the Asian paints people saw our loyal customers base and they relaxed some of their stringent requirements,” recalls Rawat. Thus they have obtained a sophisticated machine on lease from Asian Paints. With this they are able to cater to the needs of the customers with the capacity to provide as many as 12,000 different shades of paints. In the new set up, they have sufficient space to try out different innovations while decorating their show room. They plan to set up new models for bathrooms. Moreover, they have plans to carry out promotional programmes soon, but for the time being they are busy adjusting in the new place.

Looking ahead, they feel that the present conflict, which they regard as the major setback in business, would improve soon. Their experience is that people are wary of the use money today and they are very price conscious. People normally finish their cash in construction and have almost no money when it come to the finishing items. So, obviously they would be very price conscious. Therefore, the trio says that the sale they make is very dismal, about Rs. 5,000 to Rs 6,000 per day. Should the business run properly the annual turnover should normally be about Rs. 5m to Rs 6m but that does not hold true today. Moreover, credit sales is a big problem. They say that though they have to purchase the material on cash payment, they have to give things on credit to build up a strong relation with their customers. To collect the money from the customers is another challenge. But they are optimistic that things will improve soon and that is what drives them ahead despite such odds.