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August, 2004 |
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Young Achievers |
Chandi Dhakal was dreaming of becoming a lawyer or a judge when he was pursuing his BL degree in the Nepal Law Campus early 1980s. But the events followed one after the other in such a way that he became the ace entrepreneur of the country in the readymade garment sector. Now a vice president of the Federation of the Nepalese Chambers of Commerce and Industry (FNCCI), he is also sometimes touted as the next president of the apex chamber of the country. Dhakal’s journey into the field of business started with the constant exposure to readymade garment units that were running around New Baneswor of Kathmandu during his college days. Almost every fourth house in the area was a garment factory in those days when some clever Indian garment industrialists located some of their manufacturing activities in Nepal to avoid the quota restrictions they were facing in India to export to North America, the largest global buyers of readymade garments. And young Dhakal would hear his relatives and friends talk about garment industry all the time. So he too thought of trying his luck with the industry after he appeared for the BL final year exams. Though he was still hesitant sometimes, a distant relative of his encouraged him by saying that by the time he would have to go abroad for further studies in law as he was planning, the unit would have already set up. The relative also promised to help Dhakal with some of the intricacies of the business. The time was such that most of the garment manufacturers were job order firms, producing the goods as per the order of one big exporter or the other. So Dhakal also imported some machines investing a couple of Lakhs of rupees he arranged from his family and by enlisting some partners, who again were either friends or relatives. But he was not satisfied with working only as a job order firm. The period was also a sort of license raj. So he purchased one license, under the name of the firm as Krishna Garments, paying another Rs. 100,000. By the time the new formally registered unit was completed with all the machines installed, he and his partners had already invested some Rs. 1.5 million. But the hard work they put in helped to start winning good orders from abroad. That was somewhere in 1986. However, by the time Krishna Garments started winning foreign direct orders, the North American countries imposed quota also on importing garments there from Nepal. And the quota system started politics in the garment sector of Nepal. While the big and old units were arguing that they should be granted the quota, the small and new units, like that of Dhakal, were arguing that the quota distribution should be on the basis of the capacity installed so that they too would be granted quota. That debate catapulted Dhakal into the leadership of Garment Association of Nepal (GAN) in the year 1989 representing the small and newly set up units though all the other positions in the Association were won by the rival faction of big and established units. However, Dhakal showed a good team spirit and carried well with the other executive committee members. "I love to fight for my cause," says Dhakal and that fighter mentality helped him to win friends also from the other faction. The result was that he was elected for the same position also for the second term. And in 1994 he became the President of the Association. That affiliation also took him to the central committee of the FNCCI where he became the Chairman of the Employers’ Council, a position which also made him an ex-officio Vice President of FNCCI for the term 1997-99. At present he is the first Vice President of FNCCI, i.e. just one rung lower than the President. Despite his business involvement, he pursued his studies from the local Tribhuvan University and passed MA in Economics. But the business pursuit was continued as there was no turning back by now with so much money already invested and so much fame already garnered. And the chamber involvement was in fact helpful to expand his business. As an example, he cites the setting up Momento Apparels, his flagship company which is still not matched by other players of this industry in Nepal, perhaps. And the unit won the prestigious award of the largest exporter overseas from Nepal for several years in a row. Though his over involvement in chamber activities (which he sometimes calls his involvement in business politics) has now in fact harmed his business to some extent, his initial days in this movement were fruitful. It was then that he came into contact with the local representative of one of the large buyers of Nepali garments in the USA, the main market. That representative shared his idea with Dhakal that though the garment industry then was doing well in Nepal, it could not continue in the style that was prevalent among the Nepali garment entrepreneurs. The practice then was prevalently of job order type and the units usually would contract out the jobs to people who were not in their payroll. Such people would make the garments on their own and deliver at the firm after completing the job. The foreigner friend of Dhakal proposed to set up an assembly line plant. So they both entered into a partnership and set up Momento Apparels in 1993. This factory set a number of records in the history of Nepali garment industry. First, it was set up in Jhapa, a strong communist bastion then, hence thought to be very prone to labour disputes. Second, it was by far the largest, employing some 3000 people, of which almost 90% were Nepali while the industry norm then was to have almost 90% Indian labour and number of employees per firm used to be only about 200 or 250. More importantly, almost 99% of the employees in the factory were women. And it also was the first factory that trained 100% of its employees by itself. But the partnerships of Dhakal have not continued for long. That was the case in Krishna Garments as well as in Momento. The partners in the former left when Dhakal started showing his risk-taking attitude and the partners who were salaried civil servants were risk averse. In case of Momento, the partner left out about two years ago, after he left the job with the garment buyer firm following his apprehension about the future of Nepali garment business in view of the imminent phase-out of quota system under the WTO and the deteriorating law and order situation in the country. However, Dhakal is very indebted to the foreign partners. “Had it not been their participation, I might not have been able to introduce that sort of quality system that makes Momento a prime garment manufacturer of the country,” he confides. Interestingly, Dhakal says he never faced any trouble from the external forces, such as trade unions and political parties, in his business despite his factory being located in the communist bastion. “I had taken care to minimize their complaints. For example, one of the major concerns of such forces is to ensure that there would be Nepali employees in the factories. That I have ensured in my company. I do not invite someone for interview if he or she is not holding a Nepali citizenship certificate.” The risk-taking attitude of Dhakal has led him to set up a number of new ventures as well. For example, he recently set up a Pashmina factory called Emperor Gold Mount, again in Jhapa, and Beijing Roast Duck Restaurant in Kathmandu, both in joint venture with Chinese parties. While the Pashmina business seems logical for Dhakal to enter as it is similar to his existing business of garments because also Pashmina is a textile product and 100% export-oriented, restaurant business is unrelated to other existing businesses of Dhakal. The logic for such expansion as offered by Dhakal is that if you have to grow, you have to try every possibility. Though he still has to struggle for the success of these new ventures, he complains that he is not able to spare enough time for that due to his excessive involvement in the chamber activities. |
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