Tourists Growth in Improving Trend

Visitors coming to Nepal by air in June 2004 increased by 5% compared to the same period last year. But while the arrival from the third country grew by 31% that from India went down by 8%, states Nepal Tourism Board quoting figures from Department of Immigration. This is the first month this year to record decline in Indian arrivals.

Half way through 2004 (January-June), visitor’s number grew by 37% compared to first six months of 2003, reaching the total of 149,556 visitors. This is contributed by 48% increase in third country visitor arrivals and 18% growth in Indian visitors.

The Board attributes the decline in arrivals from India to the non-availability of some regular air seats in the Indo-Nepal sector. Quoting industry sources, it also says that transporters' strike called during June 1-4th and the Bandh called on June 2 led to series of visit cancellations in June. However, with the recent addition of two new private airlines from India, it is widely speculated that the figures are subject to grow rapidly July onwards, it adds.

In the third country segment, the arrivals from major markets for Nepal, Japan and America, increased by 12% and 34% respectively. The European market if taken as a single segment with countries like Germany, France, Netherlands, Austria, UK, Belgium, Norway, Switzerland, Spain and Italy recorded a massive growth of 80%. But this growth is largely due to the smaller base in 2003 June, when visitors number had sharply declined, adds NTB.

The largest increase in arrivals was from China (295%), though the total arrivals figure from there in the month stood only at 336.

 Tek Bahadur Dangi, CEO of NTB, says “the half-year growth indicates a promising year ahead. With the present welcoming climate for tourists within the country and more airlines flying into Nepal, he assured that the growth rate would continue for the rest of the year too.

However, in comparison to 1999 June, when the arrival numbers was 27,728, the figures for July 2004 are still low by 33%.

Lumbini Bank’s IPO

Nearly bankrupt about two years ago, Lumbini Bank Ltd. has now announced plan to float 1,500,000 units of its shares (30% of paid up capital Rs. 500 million) at par value of Rs. 100 per share. With this issue, the bank’s management under Nepal Rastra Bank gives an impression that it has been able to turn around the bank into a profitable entity.

Quoting the audited financial statements of the bank for the fiscal year ended on mid-July 2003, the management says the bank recorded a net profit of Rs. 89.1 million that year as compared to a net loss of Rs. 97.9 million the previous year. The contributing factors for the turn around was 49.22% increase in the operating profit in 2002-03 as compared to the previous year thanks to 27.44% increase in net interest earning, 57.80% increase in commission income and 15.88% increase in interest realization. The bank had Rs. 3600 million as deposits as of mid-April 2004 when its operating profit reached Rs. 62.3 million.

According to the management, the bank is being managed more smoothly now after some of the founder directors of the bank were included in the management team led by Nepal Rastra Bank.

After the IPO is over, the AGM will be held and the management handed over to the new Board of Directors formed, as per the plan.

The management claims to have brought down the NPA of the bank to 11% now from 31% at the time when NRB took the bank under its control.

Malaysia Tour Package Launched in Nepal

Marco Polo Travels (P) Ltd. has started offering Malaysia holiday packages for Nepalis and expatriates living in Nepal in association with Tourism Malaysia, the Malaysian Tourism Promotion Board.

The company has selected Qatar Airways as the partner carrier. The airline has four direct weekly flight services from Kathmandu to Kuala Lumpur.

On offer are two packages on fixed departure basis with first fixed departure scheduled for July 22.

The packages called Dream Holidays cost between US$ 519 for 3 days 2 nights Kuala Lumpur stopover package and US$ 668 for 4 nights Kuala Lumpur/2 nights Penang.

The program is planned to be launched with a mega cultural event early July and Tourism Malaysia is flying in a cultural troupe and speciality chefs for the event.

As a part of the build up for the packages, Marco Polo Travels organized a tour for Nepali journalists and agents in Malaysia in May.

India designates STC Sole Importer of Nepali Veg Ghee

Following a decision by the Kolkata High Court that declared illegal the import of vegetable ghee into India from Nepal against concessional duty with the State Trading Corporation (STC) of India as the monitoring agency, the Indian government has now designated STC the sole importer of all vegetable ghee from Nepal under the duty concession arrangement.

The Nepali vegetable ghee manufacturers feel that this arrangement will virtually stop export of Nepali vegetable ghee to India.

The Court had in its recent decision, after hearing a petition from the Indian manufacturers of vegetable ghee, also asked STC to pay the Indian government Indian Rs. 960 million in customs duty for the past imports of Nepali vegetable ghee for which STC had issued licence to the private importers against a service fee.

Nepal-India Trade Treaty revised in 2002 allows access to Indian market for 100,000 MT of Nepali vegetable ghee per annum at concessional duty. And it also provides that such import can be made through a canalization agency designated by the Indian government. 

For any quantity in excess of the quota the importer has to pay the normal customs duty.

Healthy Manufacturing Gaining Popularity around Birganj

With the increasing popularity of the concept of Cleaner Production (CP) among the larger industrial units along what is known as the “Manufacturing Corridor” extending from Birganj to Pathlaiya, local industrialists have started suggesting the agencies concerned to introduce it also among the small and medium units.

Cleaner working environment in one of the units with CP

“As the CP has proved to be helping to reduce losses of valuable inputs, this concept needs to be introduced also among the small and medium industries to help them revive from the ongoing spate of recession”, opines Om Prakash Rungta, the president of Birganj Chamber of Commerce and Industry (BjCCI).

His view is shared also by Kailash Mishra of Triveni Textile. And similar are the views of trade union activists. Janak Chaudhary, a trade union activist associated with General Federation of Nepalese Trade Unions (GeFONT), says, “We have seen that the CP provides a win-win opportunity for the investor as well as the labour. While it has helped to save the resources, it also provides safer working environment for the workers.” Ramji Kunwar, the central Vice President of Nepal Trade Union Congress, says, the programme has been successful as it is gaining support from all the three stakeholders – the industrialists, the trade union and the government.

CP now covers about 17 manufacturers of this area including units of vegetable ghee, soap, textile, paints, leather processing, pharmaceuticals and slippers. The first phase of the programme is already in implementation in these units. Under the program, the units are helped to upgrade their technologies, even by providing financial grants. “As the program has proved to be contributing to enhance the profitability, it is becoming popular,” opines Amar Bahadur Manandhar, the Senior Advisor with the Environment Sector Programme Support, funded by Danish assistance. 

Chandra Kishore from Birganj

Companies are Merging

Corporate mergers seem to be taking momentum in Nepal, following the path breaking union of Laxmi Bank and Hisef.

Pager service providers of the country are reported going for a major shake out as a result of easy availability of mobile phones. While KAT Easy Page is already closed down handing over its customers to DTI Paging, City Paging is reportedly preparing to merge itself into Agni Paging. This is to leave only three paging service providers in the market including Nepal Radio Paging, the pioneer of such services in the country.

Meanwhile, Nepal Sri Lanka Merchant Bank and Finance is also reported preparing to merge into Nepal Credit and Commerce Bank Ltd.

Briefs

#  A team of Chinese and Nepali technicians have completed surveying for the proposed Rasuwagadhi-Syabrubesi road that will be the second route connecting Kathmandu to Tibet Autonomous Region of China, say reports.

#  The government has brought out the draft of the Ordinance on Special Economic Zones (SEZs) proposed to be set up at various places of the country – Export Processing Zone at Bhairahawa and Special Economic Zones at Birganj, Panchkhal and Ratmate.

#  The management of the Nepal Stock Exchange (NEPSE) managed to resume transactions in the NEPSE floor on June 21 following a strike by the NEPSE staff who had locked the entrance to the floor stopping the transaction for two business days.

#       Commuters will soon be able to get printed bills for the taxi fare thanks to a decision by Patan Appellate Court which asked the authorities concerned to make it mandatory for taxis to install meters with printer. The bills will bear such details as the registration number of the taxi, the name and addresses of the taxi owner and the driver, the date of issue, distance traveled and the fare charged. With this those travelers who can claim reimbursement of their taxi fare expenses from their offices will not need to submit fake bills. Moreover, the commuters can also have a documentary proof to take legal remedy when they feel cheated by the taxi drivers in charging the fare.

#  Big taxpayers account for almost 80% of the VAT and corporate income tax, say tax authorities. But till recently, the names and number of such taxpayers was carefully guarded secret, accessible to only a privileged few.

     Now the big taxpayers office of the Internal Revenue Department has published the names of such taxpayers and their exact number is put at 312.

#  Indian Oil Corporation (IOC) has set aside Indian Rs. 560 million to invest in the petroleum pipeline project connecting Raxaul of India to Amlekhganj depot of Nepal Oil Corporation (NOC), say reports quoting a written reply by India's petroleum minister to the Upper House of Indian Parliament.

#  The government has formally handed over the management of the Birganj ICD to Himalayan Terminal Company, a firm set up recently as a joint venture between India's Concor Ltd. (60% share) and Nepal's state-owned Transit and Warehousing Management Company Ltd. and Inter State Multi Modal Transport (P) Ltd. (20% shares each).

#         A glossary of Nepali language technical terms in IT prepared by Microsoft Corporation of USA in collaboration with Unlimited Numedia of Nepal has been made public for comments and suggestions. The glossary is prepared in a process to standardize the IT technical terms used in Nepali and to use it in Microsoft Windows and Microsoft Office.

Corporate Kaleidoscope

#  Rastriya Banijya Bank (RBB), has changed its logo. RBB is the largest commercial bank of the country in terms of the deposits (Rs. 3943.8 million as of mid-April 2004) and is put under the management of an international team for turning it around from its chronic ailments persisting for over a decade.

#  Nepal Credit & Commerce Bank Ltd. has opened new branches in Pokhara and Chabahil increasing the number of its branches to 14.

#  State-owned Agriculture Lime Industry Ltd. has brought out a new Voluntary Retirement Scheme targeting to retire 33 employees. The company says it has already retired 76 employees in the first phase of this scheme.

#  Cosmic Air is reported to have received permission from Indian authorities to fly to New Delhi using 107 seater Fokker aircraft.

#  Nepal Bangladesh Bank Ltd. has been formally appointed as the administrator of the Power Development Fund (PDF) set up by the government for the purpose of hydropower development.

#  Gorkha Brewery (P) Ltd., the brewery of Carlsberg and Tuborg brands of beer, has now published the price list of San Miguel brand beer as well, thus confirming that it has finally completed the necessary formalities to acquire the rights for this brand also from the Nepali government authorities.

            Mount Everest Brewery (P) Ltd. that was formerly brewing San Miguel in Nepal was stripped of the right over the brand after Carlsberg A/S and San Miguel Corporation had reached an agreement early this year to collaborate at international level thus granting Nepali brewery of Carlsberg and Tuborg also the right over San Miguel.

Corporate Scorecard

#   Nepal Finance and Saving Co. Ltd. (NFINSCO), the first private sector finance company in Nepal, concluded its 11th AGM. The company reported a net profit of Rs. 75,938 for the fiscal year 2002-03 whereas it was Rs. 11 million in the previous fiscal year 2001-02. Decrease in interest income, increase in non-operating expenses, increase in possible investment loss provision and cumulative payment of taxes caused to drag the profit down by so much.

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