Bodhi Brikchya Nursery Flower Power

With about Rs. 20 million targeted sales this year, Bodhi Brikchya Nursery may seem somewhat big when compared to the units normally featured in this section of New Business Age. However, the way it started in early 1990s and expanded gradually over the period gives some lessons to the SMEs.

First the history. Bodhi Brikchya is a unit of Rudyn Agriflora Nepal (P) Ltd., a family firm that has been involved in floriculture for three generations now. Bodhi Brikchya was started as a small unit and assimilated to the Group gradually over the period.

In fact, Basanti Pradhan (nee Mishra) and Yogesh Pradhan had started their journey into business together before they got married. The garment factory they started in partnership exported garments directly to American buyers and flourished quickly but had to be closed down after the economic blockade imposed by India on Nepal (in 1989). Their raw materials got stuck at the customs and caused a total disaster to the business. “Everything that we invested and earned was ruined at one go,” recalls Basanti Pradhan. After the fiasco, she married her friend Yogesh and started working as the Vice Principal of the family owned school. Yogesh’s family was already in the floriculture business with its farm at Bhadrapur, Jhapa district. Being a flower lover herself, she started experimenting in flowers at her parents’ place in Sanepa, Kathmandu in 1992 using about half a ropani of land and one helper. The sales used to be made on wholesale basis. This was a start to Bodhi Brikchya Nursery.

“Being stung with the garment fiasco, we wanted to play it safe with the next venture so we started small and safe, though my husband’s family already had a good experience in the floriculture field,” she explains.

But the learning curve rose pretty fast. Within six months they had three helpers and the couple set up a retail shop at Tripureswor. “It was the first retail shop in Kathmandu selling cut flowers,” she says.

The Nursery flourished sooner than their expectations and the area of Tripureswor shop became narrow. So in 1996 they shifted to Jhamsikhel hiring nearly two ropanis of land for their showroom which exhibited the products from their farm at Jhapa for sales. But the space was still felt insufficient. “Nurseries in foreign countries are spread in huge land areas with restaurants and other shopping facilities within them. We also realized the need for a spacious showroom and were finally able to buy land at Harisiddhi and shifted here in 2003,” she adds. The Harisiddhi showroom has six ropanies of land.

Though the couple used to grow their own flowers, they had to import a lot from Calcutta, in the beginning (particularly the rose). “No one else then knew how to bring flowers to Kathmandu all the way from Calcutta,” she says. Now most of their needs are met through their farm at Jhapa and some from local growers. Jhapa farm boasts of  20 bighas of land dedicated to floriculture. They have recently set up another farm at Dharke, Naubise (25 ropanies).

All in the family

Bodhi Brikchya and Rudyn Agriflora are being managed as a family business with different members of the family looking after specific areas of the business. While Basanti Pradhan and her husband look after local and export marketing aspects, two of the brothers look after the production, the other one (who is a Chartered Accountant) looks after the finance and another brother looks after the tissue culture section. The company has 12 managerial staff managing 50 trained gardeners, 5 trained florists and about 5000 man-days per year of unskilled seasonal labourers.

The exports are carried under the Rudyn banner and the major markets are USA, Japan and Holland where there are regular exports. But the company also exports to Denmark, Germany, Taiwan and Korea occasionally. Bodhi Brikchya deals with the local market, i.e. garden design and implementation, garden maintenance services, floral arrangements, plant rental etc.

Right now, the company exports flower bulbs. Jhapa farm grows flower bulbs, ornamental plants, shrubs, plant plugs and cut flowers. The Naubise farm grows a variety of cut flowers (Gladiolus, Bird of Paradise, different types of lilies and Anthurium) for future exports. The two farms at Naubise and Bhadrapur complement each other. While the former is located at a temperate zone the latter is at tropical zone, thus making the company able to supply these flowers throughout the year without interruption. Yet another farm is being planned for cold climatic plants.

The company plans to start exporting plant saplings in the near future. However it needs some additional investment. For example, the saplings exported should not have any soil in it due to the quarantine regulations in the importing countries. Therefore, a new medium has to be developed. “We are working towards that”, adds Pradhan.

“The world market for cut flowers alone constitutes of US dollar 32 billion a year,” she informs and adds, “Imagine what the whole industry would fetch. Nepal can do thousands of types of businesses in floriculture to benefit from this huge market. Nepal has high export potential in this industry; gifted with good climatic conditions from the Himal to the Terai, easy access to the world market via international flight, cheap labour and good quality crops. And as agriculture is the predominant sector in the national economy, commercialization of agriculture via high value crops such as the floriculture should be the key to our economic strength. Moreover, the earnings through flower export helps retain at least 70% of the foreign currency within the country as expenditure for accessories and other raw materials are negligible in this when compared to other industries.”

Then why is this sector limited to such a small volume of exports?

She has many reasons to enumerate. Primary one is the agro subsidy given to their floriculture industries by other countries. Indian floriculture industry still lament about subsidies given in Zambia, Kenya etc. and are fighting for more even when they are getting 50% subsidy in feasibility studies, 25% in purchase of specialized transport units, 50% of the cost in greenhouse and godown facilities, 50-100% subsidy in publications, assistance in participation in exhibitions abroad, packaging development, HRD, sales tour – air travel in economy class and 20 INR per kg. in airfreight and the list goes on.

“Nepal government has not provided any of these facilities and, on top of that, has further imposed export taxes of 20%. How in these conditions can Nepalis compete in the world market? Till now our exports have flourished through references from earlier buyers to others. Large exports in this industry needs advertisement in the world market. But we don’t have the resources to participate in Fairs or to advertise in the world scenario,” she adds.

According to her, floriculture entrepreneurs have to invest a lot in developing infrastructure such as acquiring large expanses of land, and then developing it to be suitable for this industry, constructing greenhouses, godowns, cold storage facilities and acquiring equipment. But there is no subsidized loan available. Thus, the entrepreneurs have to plough back the profits. “Therefore, everything has to go very slow here in this industry,” she adds.

Though in the year 2002-03 budget the then Finance Minister recognized floriculture as a potential export industry and had announced a rebate on loans to the floriculture sector, but it was sadly unimplemented. The scheme is included also in this year’s budget, but Basanti Pradhan does not see anything serious going on about its implementation so far. “We are lobbying for it from the Floriculture Association of Nepal, but I cannot say when it will actually start being implemented,” she informs.

Another limitation she points out is the lack of enough tonnage for cargo with the airlines that come to Nepal. The total export of flowers from Nepal is estimated at 40 tons per year. Thus bargaining with the airlines cannot be done satisfactorily. The problem is compounded as other Nepali exports are mostly handled via sea route. “Indian exporters pay one-third of the airfreight as compared to us as their national carrier charges very less and still they get subsidy !!!.”

Despite those limitations, Bodhi Brikchya and Rudyn Group are going steady. The existence of large international market and the potential for Nepal (due to its diverse topography) to cater to the market clearly show that floriculture can be developed in Nepal as a good business. To prepare for that the company has started developing its specialization.

And the areas of specialization selected by Bodhi Brikchya and Rudyn Group include flower bulbs, cut flowers, plant plugs and hybrids. It has already developed a number of hybrids that are named after the children of the family so that interest is created amongst them for sustenance and continuation of this business when they complete their education. However, the firm has not patented these hybrids. “The patenting process is very slow,” she explained as the reason for not going for it.

Within a few months they have plans to start a training centre to train gardeners and provide them employment within and outside the country. Though Nepal has started producing floriculturists, Basanti Pradhan says they will be needed only when the exports volume increases substantially. Right now the industry direly needs trained gardeners. Till a few years ago Bodhi Brikchya was facing the problem of their trained gardeners leaving the company to look for other ventures, but that trend has now reduced, according to Pradhan.

They also plan to go into contract farming with neighboring communities in the coming years. As per their observations, during peak seasons of growth in Kathmandu, neighboring countries have less growth optimity. The trend of growing flowers during these seasons has also reached a potential stage where export seems to be the only resort to attract more growers and stabilize price downfalls. Thus the company has also realized the importance of marketing these products to other countries.

“Till now the credit goes to the private sector who have worked towards development of this sector. Now the government should also meet half way to help substantially boost this sector towards its industrialization.”

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