Interview

TK Gupta guided Dabur, the Ayurvedic preparations giant of India, to set up its production base in Nepal and led the Nepal operation of Dabur since 1992 as its CEO winning a number of professional accolades both for his company as well as himself. After being entrusted by Dabur to head its newly set up Bangladesh operation, Gupta shares his impressions about Nepal in this 'exit' interview. Excerpts:

How do you assess the change in the business environment in Nepal over the decade that you were here as the head of Dabur’s operation in Nepal?

During this period, I have noticed that there is vast change in the business environment in Nepal.  The business community has now understood that manufacturing is much better than only trading and the competition among the business houses here growing very strong and positive.  This has given much help to the consumers, as they are getting quality products for affordable prices.

How was the change in the attitude of the bureaucracy and the politicians towards the business?

During this period, I have noticed remarkable changes in bureaucracy.  Initially there was a feeling that profit is a bad word, but now I think they have understood that industrialization and development of economy go together and unless and until economic growth takes place in a country, development will not be a real one. I feel the present bureaucracy understands very strongly that good industrial/business growth is necessary for the development of the country.  Regarding politicians, I do not want to say anything.  I think they have their own problems and that the problems are still continuing and I do not find any positive change that has taken place during this period.

Apart from security concerns, what areas do you see as the priority areas for the Nepali policy makers to concentrate on in the immediate future for facilitating investment and business?

The SAFTA framework has been signed and let us hope that the implementation of the SAFTA would be from 01st January, 2006 as scheduled. Meanwhile Nepal is also joining WTO. With these, the challenge is becoming big for Nepal. Now my feeling is that Nepal should concentrate on the areas, which will be sustainable. That means, the concentration has to be in areas where Nepal has the advantage of the location. Such areas may be hydropower, tourism, health or education, to name a few. Also worth promoting are some very sophisticated industries, which need clean and good climatic condition.  In order to attract good investment in those industries, the government should give good incentive packages and develop infrastructure.

How do you assess the growth of Dabur’s Nepal operations after steering it for over a decade?

We have reached a stage where it would be difficult to register the same growth, which we registered over the last one decade. This is particularly so with the concessions offered by the neighbouring countries.  There might be some growth in Dabur Nepal’s operations, but it may not be as much as it was earlier. If some corrective actions are taken by the government, Dabur Nepal could grow further by introducing various new products and also by taking the advantages of the knowledge of utilizing the medicinal plants and herbs for new product development. Nepal can become a source for many raw materials, which are being used by various manufacturing units of Dabur. We are actually concentrating on those areas and I hope it would start next phase of the growth process.

Why has not Dabur Nepal considered allowing the ordinary Nepalis to take shares in Dabur’s Nepal operations?

Actually Dabur Nepal’s growth has taken place only with the active participation of the common people, those who are working for collecting the medicinal plants and herbs as well as growing them on our behalf.  So, I feel that the ordinary Nepalis are already taking part in the development of Dabur Nepal.  If your reference is about the equity participation in the company, then I would say we still feel that operating as a private limited company under the strict discipline of corporate governance and professionalism is much better option at present in a country like Nepal.

How has been the status about Dabur’s initiatives in helping the Nepali villagers in remote areas to grow the medicinal herbs? What expansions are being planned in this regard?

We are getting very good response from various remote areas as well as in Terai for growing medicinal plants and herbs.  We are at present in the preparation of a very big project in this connection and it can be seen in a year or so. But I do not want to elaborate on it at this moment.

Is there any new product range that Dabur Nepal plans to start producing in near future?

As the export potentiality is going to be curtailed, the production base for some of the Dabur products may be shifted to other locations. However, Dabur Nepal is at present concentrating on increasing the size of the pie in local market. Accordingly, a good number of new products have been identified, which would be manufactured in Nepal shortly.

Why is not Dabur interested in setting up medicine production facility in Nepal though, as you say, Nepal is the major source of the raw material for Ayurvedic medicines?

For Allopathic medicine, we had a project but due to some changes in the corporate operation of Dabur in India, this project had to be abandoned. But Dabur is exploring the possibility of producing Ayurvedic medicine in Nepal.

Recently you had said that the Maoist insurgents had not been causing serious problems to the Dabur program to grow medicinal herbs. How changed is the situation now?

There still are certain problems in various locations where we are growing our medicinal plants and herbs. But I do not feel those problems will hamper us much. Of late, we are being targeted by the Maoists in our factory, but so far nothing so harmful has happened and we hope they would understand that we are a professionally run company and, to some extent, we are helping the people in the remote areas of Nepal.

How do you feel about not being able to persuade Dabur’s board not to shift the site for the proposed fruit juice plant from Nepal to Jalpaiguri in West Bengal of India?

I think this is to be seen against the perspective of the principle that guides the decision on locating a plant. Jalpaiguri has certain locational advantages as it is nearer the source of the raw material for the production of concentrates for fruit juices and vegetables.

How do you compare the business environment in Nepal and in Bangladesh where you are now stationed?

I feel business environment in Bangladesh is much better than in Nepal. A large number of business people are Members of Parliament in Bangladesh and also many of the Ministers there are business people.  This can give you sufficient feeling about the business environment in Bangladesh.  But the problems in political front are of similar nature in Bangladesh as in Nepal. For example, calling for a bandh at least once in a week is regular in Bangladesh as it is so in Nepal. Otherwise, I feel the business environment is better in Bangladesh. Let me give you some examples. We applied for the company registration in Bangladesh on 9th July, 2003 and we got it on 16th July, 2003.

Another example is that trucks and vans running on export duty in Bangladesh get preference in traffic jams in similar manner as ambulances get preference in Nepal or elsewhere.

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