Inner-View (Business Age)

Inner-View

We Have Not Seen a Worst Time Like
This, Before: Rajendra Khetan

How is your organization performing in terms of growth and turnover?

If you see this year’s result, the situation is not very encouraging. But if you see our company in terms of our segment, we are either in number one or number two position. In beer, Carlsberg and Tuborg, are undoubtedly number one. In totality, we may be in number one or number two position not lesser than that. In finance company, we are among the top three. In noodles industries, Mayos is in number two and we are gearing up to be number one soon. So it won’t be wrong to say that we stand as a market leader.

What norms and principles does Khetan Group of Industries stand for?

We strongly believe in efficient modality, i.e. in effective management committee system whereby at the owner’s level we don’t meet very frequently with the management team. We sit down on a weekly basis just to get appraisal of the operation. Otherwise it is basically the management committee that looks after the day-to-day operation and future strategies based on genuine plans and projections. We have the budget for the whole year’s program. And based on that, every week we try to settle down the issues. This type of modality has been successful for us for the last ten years and I admire this.

How do you analyze the current trade scenario of the country?

The current trade scenario is really very bad. I think that in the whole history of Nepal, we have not seen a worst time like this. Tourist arrival has sharply declined. In terms of GDP also, there is a big slide because of security concern; because of bureaucracy not taking decision on time; divided politicians has sparked chain effect. The purchasing power of the consumer is eroding. Peoples’ morale is down. Because of all this, the industrial growth is not positive. And the worst part is that the whole situation is going worse day by day.

What do you think about the renewed trade treaty with India? Will this latest treaty improve bilateral trade between Nepal and India?

If this protocol had not appeared, then the treaty would have been in question. So I think this protocol in addition to the 1996 trade treaty has helped, in fact, to renew the business between the two countries. Despite the provision of quota, value addition is good for the country. The bottom line is that by the end of the fiscal year, we must see that the total volume in terms of quantity, price, sales or exports should not go down. I think although there is new quota ceiling on four items, the other 180 items can subsidize for the loss and take over the market. So in totally, quantity in terms of volumes and values will not decrease. The only minus point is trade in those four items will decrease.

What are the comparative edges of your products vis-à-vis other similar products available in the market?

The advantages in terms of brands, goodwill, market equity, the position in the market, the quality and backup, the diversity is concerned, I think we are at a better edge. We constantly try to see at how consumers look at our products and from that angle the consumers are at harmony with our products. This is our commodity advantage and that’s why we are leading the market.

In our part of the world, business ownership is still confined to the family. Don’t you think that there should be a difference between ownership and management in a professional sense?

In fact, Nepal’s industrialization history is not more than fifteen years old. At that time we were just playing with the tariff differences with India. We used to get licenses and do business by just selling off those licenses. But after the popular movement of 1990 and the ensuing changes in the business system in the name of OGL and liberalized policy, I think things have totally changed. Now we have to be more compatible to information technology and better human resource mobilization based on latest technology. However, we all still not ready to accept this because of shortage of manpower for the changes. But we also know that we will be isolated if we don’t make timely change on this aspect.

Is the Nepalese business community mature enough to enter the World Trade Organization (WTO) and for that matter, is the government really prepared?

No, not at all. People are not aware and compatible of all aspects of WTO. Moreover, our businesses are not compatible to this. Our laws are gradually trying to be compatible. But I think in the context of Nepal, competitive and comparative advantages are at the negative side. Therefore, we must identify those products that have competitive advantage. It may not be in manufacturing sector. It may be in different sectors as well like financial sector, offshore banking, services, tourism, religious tourism or educational fields. Because, we are not good in core manufacturing. So things have to be changed and a time can come whereby total line of business may have to be changed. And we have to be prepared for that. This is one aspect. The other aspect is that changes have to be made immediately in conformity with changing world trade scenario. More capital has to be injected to see change. Human resources have to be brought or developed. The possible market niches have to be explored befitting the domestic industries. All this has to be achieved by 2004.

How do you assess the role of FNCCI in the present deteriorating business environment of the country?

FNCCI’s role is very crucial and important. But we have to see whether we are really achieving that. However, I should say that the accomplishing and the lobbying side need to be further geared up. For the first time in the history of FNCCI, the Prime Minister, the opposition leader, other political party leaders, the industrialists, the finance, industry and Home Minister were invited at FNCCI and the problems and solutions were identified and strategies were chalked out to improve the situation. And we were hopeful then. But again the situation is changing and moving towards more security-oriented. So, it seems that again we have to change our strategy. And then we have to address three different segments. The district chambers who are at remote areas; the commodity, which has its nature and; the individuals who are the players of the market. We need to bring coherence between these three crucial components. Our success lies here.

Who do you think is responsible for the mess in the business sector of the country?

It’s very clear. Divided politicians, weak bureaucracy and laws having double interpretation. This way, the whole system has gone wrong. Let me tell you this clearly. Before 1990 we used to give money under the table to get our work done. But now we pay to see that our work is not damaged. True that reform has taken place but corruption has remained intact. This is costing money on one side and on the other we are talking about corporate ethics. This is not good.

Are business communities behaving responsibly?

We are also responsible for this, no doubt. But we are the second part of it in terms that we are compelled to do so because otherwise our things will not be done. Either we pay money to get things done or wait and see as there is no response and we may have to dose down. So, paying little helps. Hence I feel we are compelled.

As you are also the Honorary Nepalese Consul for Portugal, where does Nepal – Portugal ties stand at present?

Basically my nomination to this honorary post was in 1995 on the ground that Portugal was to take the lead of European Union. EU and SAARC do have the potential for mutual benefit in social development and other experiences. Besides, in bilateral term, Nepal and Portugal share common views on many issues of international importance including economic aspects. Besides, both Nepal and Portugal share a common feature in the sense that both have big neighbors. Like Nepal, Portugal has a big neighbor Spain. So with these aspects in mind both Nepal and Portugal deemed it fit to have Honorary Consuls in respective countries for the common mutual interest.

What does the recent trend of foreign investors pulling out of banking sector and corporations like Sajha Yatayat and trolley bus closing down indicate ?

Well, these messages to the nation are definitely not good. But the message that it carries in the international community is even worse. And this worries us. In the last 10 years about 10 multinational or international brands or companies or groups have withdrawn from Nepal. And the incoming is ironically lesser than that from the numbers that have pulled out. This is not a good message for the nation. The reasons must be immediately digged out and promptly addressed. Because, its long-term effect will be severe as Nepal’s credibility in the international area will suffer.

What Nepal-Britain Chamber of Commerce and Industry (NBCCI) is doing?

We are basically looking at 4 to 5 issues. Our first priority is to look after the issues of attracting British investment into Nepal. Number two, we look after corporate aspects whereby the switch over from traditional business family to corporate strategies and saying no to corruption at one point is our agenda.

Number three, we have formed an investment security group whereby the financial chambers and their patrons or their heads of missions can come under one roof and address and lobby on important issues of the economy. And the fourth one is we are trying to help the tourism sector in terms of boosting Nepal’s image as a tourist friendly destination. Himalayan expo, members’ interest mobilization, etc are some of our common interests that we share with other bilateral chambers.