Biznews

Richard C. Van Rooy, the Dutch owner of K33, a company that provides hair solution to the balding community, has set up a new outfit in Nepal leaving his earlier venture which he says has been violently taken over by some Nepalis.

K33 Hairmotel HGU (P) Ltd., as the new company is called, is owned by Van Rooy completely while the earlier company, K33 Hairhotel, was registered under the name of Kiran Shrestha, a Nepali citizen. The new company is planning to go fully operational from February 15, it is learnt.

According to sources close to the new company, it now has 25 people as staff, mostly those who deserted the earlier company. The ace personality is Keshav Sharma, who was one of the directors in the earlier company and now holds the same post in the new company. He left K33 last year before the dispute over the ownership had erupted ultimately forcing Van Rooy to forget about his investment in K33 Hairhotel.

Tourist Arrivals up 9%

Nepal received 288,356 tourists by air in 2004 recording a marginal 9% increase as compared to 2003, states Nepal Tourism Board.

However, the 4th quarter saw a 14% decline in the arrivals compared to the same period previous year.

Birganj ICD to Handle Bilateral Cargo from February

Nepali and Indian authorities have agreed to allow the Inland Container Depot (ICD) at Birganj to handle cargoes for bilateral trade between the two countries. So far the ICD was allowed to only handle Nepal’s exports and imports to and from third countries.

However, there is a caveat. Nepali authorities have to approve and intimate the Indian authorities by January 10, 2005 on the customs procedures proposed by India to be followed while handling bilateral cargo by the ICD. The Nepali authorities are studying the proposal presented to them. If Nepal finds some of the provisions difficult to agree to, the bilateral cargo handling may get further delayed.

The Nepali business community has been demanding for an early start to bilateral cargo handling by the ICD as it is expected to reduce transport costs thus making the goods cheaper. Also the ICD management company, Himalayan Terminals, is likely to make profits if the ICD is allowed to handle bilateral cargo. The volume of the third country cargo is not enough to meet all its costs.

According to sources, who had the opportunity to glance through the proposals made by the Indian side, it has been proposed to make the customs procedures very stringent.

Sugar Import Duty Slashed Further

In a controversial step that may be detrimental to the country’s sugar industry, the government has slashed the duty on sugar imports from existing 25 percent to 10 percent.

This is the second time that the duty on sugar import has been reduced this fiscal year. Before Tihar, the festival when the demand for sugar is highest in the country, the government had reduced the duty from 25 percent to 15 percent making it applicable only for sugar imported by state trading corporations.

Now the production from Nepali sugar factories has started coming into the market but as the import duty is further reduced, it is likely that the domestic sugar factories will suffer as their production cost is higher than that of Indian factories. Some sugar market analysts say that the duty reduction should have been effected after waiting for some months, i.e. around April next year, to exhaust the domestic production. However, government sources say that they had to make an early decision as the sugar scarcity did not show any sign of easing even after about one month of sugarcane crushing. They blame the current shortage on the nexus between the sugar factories and sugar traders. Normally, the owners of sugar factories in Nepal are also importing and trading sugar.

The government’s decision is said to be based on the projection that sugar output this year is likely to be short by 60,000 metric tons as compared to the total annual demand of nearly 140,000 metric tons. However, reports say that India too is going to face a shortage of sugar this year.

Meanwhile, the government is also reported to be preparing to set up a Sugar Board, a regulatory body to oversee the sugar market. However, the sugar market analysts are not optimistic. ‘This will be just another bureaucratic white elephant,’ says one analyst seeking anonymity.

India Changes Testing Rules for Nepali Edibles

The Indian government has changed its testing rules for food products it imports from Nepal.

According to a press release issued by the Indian Embassy, tea, pulses, pulses’ products, cereals and cereal products from Nepal will be subject to 5-20 percent random sampling now as compared to 100 percent testing required earlier.

Nepali food exporters were complaining of various hassles at the Indian customs due to the food testing requirements and this decision is expected to ease some of their trouble.

AAAN Changed into AAN

The Association of Advertising Agencies Association Nepal (AAAN) has decided to change its title to Advertising Association Nepal (AAN) paving the way for advertisers and media houses to become members of the club which was hitherto the umbrella organisation of advertisement agencies only.

The 10th Annual General Meeting (AGM) of the Association held recently has also approved the plan to institute a Telly Award to be presented to the best TV commercial produced in the country during a year. The Association has already been presenting Crity Award to the best advertisement materials and campaigns produced within a year in Nepal.

Mid January Threat

With the month of Poush coming to end, the business community is getting scared.

The reason is approaching deadline of Majuary 13 (end of Poush) that the leadership of the priavate sector had agreed to implement the demands of Maoist trade union before the rebels let reopen some 50 business units they had forced to close in September.

According to sources at FNCCI, a survey has been carried out across some 200 business units and the situation was found not so bad in the parameters (mainly the minimum wage) related with the demands of the rebels. The report is expected to be made public towards the end of Poush. It indicates that the business community is trying to find the solutions to the issues raised by the Maoist trade union.

But will the rebels accept that peacefully?

Dabur Changes its Logo

Dabur, the over 100 years old Ayurvedic company, which has a manufacturing base also in Nepal has changed its logo to better reflect the brand promise ‘Celebrate Life’, the company says.

The new logo retains the three principle elements of its earlier version—the tree, the tree trunk and the leaves. The tree in its identity embodies trust and heritage, and in its form and colours the future aspirations, says the company. The trunk in its new logo mirrors the form of three people with raised arms in exultation as the symbol of life. The multiple branches symbolises growth and strength while the leaves denote youthfulness and health, it adds. The dual colours in the leaves represent combination of tradition and modernity.

The unveiling of the new logo follows a restructuring of the company’s brand identity which has given birth to a portfolio of five power brands. While ‘Dabur’ is a healthcare brand , ‘Vatika’ is for herbal beautycare products, ‘Anmol’ for value for money, ‘Real’ for fruit beverage and ‘Hajmola’ for tasty digestive products.

Sunrise Group Enters Pharma Biz

SR Drugs Laboratories (P) Ltd. has entered the Rs. 6 billion pharmaceuticals market by formally launching about 50 products amidst a ceremony in Kathmandu on December 17. It has other 40 products in the pipeline, as per information revealed on the occasion.

Promoted by Sunrise Group that hitherto concentrated in distributorship of imported electronic goods and investing in banking and insurance, the new company says its 40,000 sq. ft. building at Satungal has WHO-GMP complaint facility.

The company aims to clock a turnover of Rs. 100 million by the end of 2006.

Corporate Kaleidoscope

#  Nepal Rastra Bank (NRB) has handed over the management of the Lumbini Bank Ltd. to the Board of Directors of the bank elected at its seventh AGM which was held recently. NRB had taken control over the bank two and a half years ago after it found irregularities in the bank's management by the earlier Board of Directors. The new Board of Directors of the bank has Prakash Shrestha as its Chairman.

#   Kathmandu now has another upmarket cinema hall similar to Jai Nepal cinema hall. Vision Quest, the firm that is running the Jai Nepal cinema hall after renovating and converting it to an upmarket theatre, has leased and changed the Kumari cinema hall in a similar fashion. The Kumari complex now has two theatres of 308 and 236 seating capacities and a ticket would cost Rs. 175 per person, the same rate as in Jai Nepal.

Chartered Academics International (P) Ltd. celebrated its 8th Anniversary recently. By now it has trained over 8,000 people in accounting under various programs. On the occasion of the anniversary, it announced special 100% scholarships to the needy, handicapped, orphan and widow and instituted Best Accountant of the Year Award.

Corporate Scorecard

The business slowdown seems finally hitting the financial institutions as the audited reports from some finance companies indicate. Also the dividend distribution by these companies has reduced because of the challenge to increase their paid up capital (by issuing bonus shares) to make sufficient reserves to cover their non-banking assets.

National Finance Company has reported that its net worth declined to Rs. 91,019,000 as of mid-July 2004 from Rs. 92,254,000 a year earlier. The corresponding figures for the company’s book value per share are Rs. 252.83 (mid-July 2004) and Rs. 307.51 (mid-July 2003). However, the company has increased its net profit to Rs. 15,174,000 in 2004 from Rs. 10,724,000 in 2003, thus increasing the earning per share (EPS) to Rs. 42.15 from Rs. 35.75 the previous year.