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Archive for the month “August, 2013”

US Embassy To Assist American Companies For Investments In Nepali Hydro Sector

The Ambassador of United States to Nepal, Peter W. Bodde expressed the support of US embassy for American companies interested in Nepali hydropower sector. According to a press statement by the embassy, Bodde hosted a conference call with US businessmen on August 21 to discuss opportunities in the hydropower sector in Nepal.  ‘The Ambassador gave an overview of the economic and business climate in Nepal and then took participants’ questions, including queries about upcoming hydropower summits in Kathmandu and how the US embassy can assist American companies investing in Nepal,’ says the statement. Twelve participants, representing industries including energy and infrastructure joined the call, including some with a history of investing in Nepal.
Although challenges remain, Bodde, during the conference call pointed out that Nepal has the second- largest hydropower resources in the world and less than one per cent of this potential has been developed.  He emphasized that the US Embassy stands ready to assist American companies interested in investing in Nepal. In the closing of the conference, Bodde noted,’ Nepal has enormous hydropower potential and the time to engage with this sector is now.’

Economic Downturn In India, Indonesia Raise Fears

Economic Downturn In India, Indonesia Raise Fears
The recent equity sell-down and currency fall in India and Indonesia have raised contagion fears across Asia, similar to the Asian financial crisis in 1997. What started off as a relatively contained sell-down in Indonesia and India is now turning into a confidence crisis. The Indian rupee has lost 12 percent since May 2013, making it the worst performer in the emerging market currency basket, Xinhua said in an analysis Saturday.
There is now widespread panic over the rupee, and the short-term measures imposed by the Indian government such as curbing the import of gold are widely seen as ineffective. In Indonesia, the sharp weakening in the rupiah and weak commodity export prices have caused its foreign exchange reserves to fall by a significant 18 percent year-to-date from $112 billion to $92 billion, fuelling investors’ concerns over the defensibility of the currency and the concurrent risks of sharp policy rate hikes.
The impact of capital outflows and financial turbulence as a result of India and Indonesia problems will undoubtedly be significant and widespread in other Asian emerging economies such as Thailand, Malaysia and the Philippines, where bubbles have been inflated by easy credit and super easy monetary policy. During the 1997 Asian financial turmoil, the currency meltdown in Thailand sent a chain reaction of weaker currencies, falling stock markets and a steep rise in private debt across Southeast Asian economies and South Korea, sinking most of them into deep recession.
CIMB research said for the rest of the Asian economies, recent developments in India and Indonesia should have very little negative economic impact. Backed by better regulated financial sector and stable domestic growth drivers, Asian financial markets should also be able to maintain a steady inflow of capital. Credit Suisse research believed that the impact of India and Indonesia sell-down upon North Asian economies such as China and South Korea will also be limited. (

‘Crisis unlikely due to currency depreciation’

Negative spillover effects from India in the Nepali economy have always been pertaining issue for the Nepali economy.  Crisis in value of rupee is the latest in the series. With the sharp depreciation of Nepali rupee (NPR) against the US dollar, caused by the devaluation and volatility in Indian rupee (INR), experts have started serious debate over the pegged exchange rate.
However, chief economic advisor at Finance Ministry Dr Chiranjivi Nepal ruled out the possibility of revising pegged exchange rate.  ‘The weakening of Indian and other Asian currencies is unlikely to bring crisis like 1997, now the economies are in better position compare to that period,’ said Nepal. According to Nepal, the depreciation of INR will not continue for long time. Indian government has continuously putting effort to control the steep fall of value of rupee against dollar,” he opined, adding that it can be expected that Indian central bank will take aggressive measures to contain INR in a level.
The recent massive depreciation of Indian currency has thrown all these logics out of the window and the situation calls for a serious debate on whether Nepali rupee should maintain the peg system. When asked about the review of existing exchange rate, Nepal rejected such calls. ‘Nepali economy will encounter many problems if the existing exchange rate is changed,’ he said. ‘Reviewing the rate will ease the dollar price but cheaper foreign goods will influx the Nepali market and more money will be needed for the import of goods.’ He further added that the government to take proper policies aiming to boost the export to take benefit from the strong dollar.

‘Malaysia Tourism Aiming 36 Million Tourist By The Year 2020’

The World Tourism Organisation has declared Malaysia as the 9th most visited country in the world for the last three consecutive years since 2009 and it has also achieved another feather on its hat by becoming the tenth friendliest country across the globe as declared Forbes Online. What makes Malaysia so especial and to share tourism promotional activities in Nepal, Amran Abdul Rahman, director of Tourism Malaysia in a rendezvous with The Corporate Weekly Associate Editor Sujit Nath revealed how Malaysia became the hot destination for the tourists from all over the world.Excerpts:
What is purpose your of visit in Nepal?
This is for the first time I came to Nepal to get a first-hand experience of the market. Tourism Malaysia is doing market research in Nepal for the last 14 years and so far the response is good.  I came here to welcome the people here to Malaysia under our promotional banner of ‘Visit Malaysia Year 2014’. A seminar was recently conducted on tourism on August 23 in association with the local tour operators. I look forward for a better relationship with Nepal in terms of tourism.
How you rate Nepal as a market in terms of tourism?
I think there is a great market in Nepal and its growing as compared to last year. An average Nepali tourist spends nearly 62,423.76 NPR, which is 2000 Malaysian Ringgit. Tourists from Nepal prefer to stay longer as compare to Indian tourists. So, the more they will stay — the more we will be able to generate the revenue. In Malaysia people more about Nepal than India because of its long association and common features in terms of lifestyle. But we are happy that response from Nepal and India is so far good.
What category of Nepali tourists prefers Malaysia as their favourite tourist destination?
Most of the Nepali tourists come with their family but we have seen in recent years that a large number of youngsters are also exploring Malaysia. In last six months from January to June there was a growth of 33.7 per cent Nepali tourist in Malaysia. This was a significant growth and we are happy that the market is growing. We are confident to serve our best to the Nepali tourist with utmost homely care. It’s our privilege to provide a comfortable stay in Malaysia.
The banner ‘Visit Malaysia Year 2014’ seems inviting with its marketing strategy. Could you please elaborate on that?
Well I must say it will be the year of fun and frolic with endless new day-night mesmerising shows. What added more zeal, is the scheduled Grand Prix, which is going to be the show stopper. We are expecting a large number of tourists from across the globe to witness the carnival. For the shopping lovers, we are organizing a big event under the banner of Malaysia Mega Sale festival where the tourists will get all kind of branded lifestyle items in a cheaper price.
Malaysia tourism is doing a lot of promotional activities for Business and customized personal tourism. Could you share your views on the latest trend and response on Business tourism?
It’s a high end tourism segment and the Malaysia Convention and Exhibition Bureau (MyCEB) — meant to deal with the business tourism — has a done a commendable job. There is a rise in the business meetings of some of the big corporate houses in the world. The other areas, which include customized personal tourism packages, are weddings, honeymoon, cruise, luxury tourism etc. We are getting good revenue in these
segments too.
Tell me something about the overall all tourism scenario in Malaysia?
In 2011, Malaysia recorded 24.7 million tourist arrivals with tourist receipts totaling RM 58.3 billion. In 2012, the country’s tourist arrivals and receipts registered more than 25 million RM. The Malaysia Tourism Transportation Plan is targeting 36 million tourist arrivals and RM 168 billion in receipts by the year 2020. Kuala Lumpur was voted as the fourth best shopping city in the world and I am sure with other attractions which we have in Malaysia, we will be able to woo more tourists from Nepal and India.

The Consistent Growth Of The RMC Group

The Consistent Growth Of The RMC Group
–By Sagar Ghimire 
Rajesh Agrawal, Director, RMC group
Rajesh Agrawal
Director, RMC group
The export of RMC cements to India comes as a respite for the economy of Nepal that has long been suffering due to the dominance of imported goods from India. Along with catering to the rising demand for building materials like cement, steels and pipes in Nepal, the RMC Group now strives to expand its market to neighbor down south. Amidst a deepening trade deficit with India, the RMC Group is now planning to export manufacturing goods to the country. The strategy is to import raw materials and export value-added products to India.
Conviction behind success
Since Nepal was completely dependent on imports for steel, Rajesh Agrawal, Director of RMC group, thought of establishing a factory to meet the growing demand of steel in the country. Despite his lack of experience and knowledge on the manufacturing industry, Agrawal did not shy away from venturing into a relatively new front.
“Promising prospects for steel manufacturers prompted me to start a factory despite my inexperience,” Agrawal says. He recalls being firm on his conviction to develop it through the learn-by-doing approach. Today, the RMC Group has leapfrogged from a small-scale firm to a big industry through this approach itself.
The company initially formed for steel drum packaging for paints is now manufacturing steels, pipes, cements and sheets. Along with catering to the rising demands for steel, the company also meets the needs of pipes and other construction materials in its backyard. Growing steadily thus, it is now eyeing a broader market in India.
“Forty per cent of our total turnover is exported to India today,” Agrawal states to The Corporate. The group has recently started exporting cement to India and is the first company in Nepal to do so.
The RMC Group was established with an investment of five million rupees and now has an annual turnover of 5 billion rupees, informs Agrawal. Apart from the manufacturing sector, the group has investments in the banking and insurance sectors as well.
Industrialisation was yet to begin in Nepal when Agrawal had begun business. Despite limitations, Nepal gradually headed towards industrialization and augmented economic growth in the country. “The steel consumption is directly related with economic development and the economic development of Nepal has increased with the consumption of our steels,” says Agrawal.
‘Ups and Downs’ in Business Environment 
In the two decades of its operation, the RMC Group has experienced some ups and downs. Few years after the group established its factory to manufacture steel, the Maoist insurgency took off and posed many challenges to industrialists from running their business. “However, the business environment recovered after the Maoists came into the peace process,” Agrawal says.
Affordability of local consumers has gone up in recent times due to remittance and other sources of income. “People in villages have been switching to corrugated sheets from bricks, straw and other local materials to roof their houses,” Agrawal observes.
However, the per capita steel consumption in Nepal is still one of the lowest in the world – 30kg per person, according to Agrawal, whereas the average is more than 300kg per person in the world. Agrawal is hopeful that steel consumption will get a boost in the days to come with political stability in the country.
But despite these vicissitudes, consistent service to customers for the last 20 years has made RMC a credible brand. “The consistent quality provided to consumers has ensured the growth of our companies,” Agrawal says.
Valuing Labour 
The company had begun with only 15 employees in total, but today, there are 400 employees hired by it. It has employed 80 peoples in its cement factory and has been hiring staff for administrative purposes through vacancy calls in newspapers.
“A large number of our human resources are labours and we recruit them at the local level where our factories are located through the contractors,” says Agrawal who values the labour force for the success of his company.
CSR activities 
The RMC Group has arranged drinking water facilities at the villages of the workers of its factories in Simra and other places as a part of its Corporate Social Responsibility. It has built water tanks, provided water pipes and bored water wells as well.
Similarly, it has provided corrugated sheets, steel and other construction materials to schools at the factories’ sites.
The company is also providing medical services to the families of its workers regularly.
Competition & Promotional Activities
According to Agrawal, the RMC Group faces competition against Jagadamba Enterprises for pipes and Hulas Steel and the Biratnagar-based Arati Steel for Galvanised sheets.
The group runs TVC (television commercials) as well as media advertisements in newspapers as a part of its promotional activity. Likewise, the group comes up frequently with scratch coupons, gift vouchers and other schemes for its customers.  Targeting customers at the local level to advertise its products, the group airs advertisements through FM stations all across the country.
Social Affinity 
While Director Agrawal is taking care of the companies and factories, his father Shrawan Kumar Agrawal – also Chairperson of the group – is involved in politics and social sectors.  Chairperson Agrawal was a former Constituent Assembly lawmaker representing the Madhesi Janadhikar Forum-Nepal. He is currently serving as Chairperson of the Marwari Sewa Samiti, an organization for social service to the Marwari community.
Palpa Cement at the offing
The RMC group has a project in Palpa to produce clinkers and cements in the pipeline. “Clinkers are largely being imported from India for cement production, and we are planning to produce it, and cement made from it, from Palpa,” informs Agrawal. The group is already in talks with the government for building the necessary infrastructure in the proposed factory sites.
RMC Group


Brief History
RMC Pvt Ltd was established on 1993. Prior to that, it was a firm to trade steels by importing from Japan, Korea and India.
Rajesh Agrawal left Rajesh Hardware Pvt Ltd to his partner on 1995 and he owned RMC Pvt Ltd.  His partner is still doing the business on hardware. RMC is focusing its business on manufacturing.
Award and Recognition
RMC already has the ISO 9001: 2008 certificate and the company was recently conferred with ISO 14001: 2004 certificate for its environment management system. Also, it has been awarded NS mark by Nepal Bureau of Standards & Metrology (NBSM), a National Standards Body under Government of Nepal, Ministry of Industry, Commerce and Supplies.
Involvement of the RMC group:
1. Rajesh Metal Craft Pvt Ltd
Sister concern of the RMC Group, RMC Pvt Ltd manufactures and supplies MS Black Pipes, Galvanised Iron Pipes, Galvanised Plain and Corrugated Sheets, Tubular and Telescopic Steel Poles and Fabricated Steel Structural, among others.
2. RMC Cement Pvt Ltd
RMC Cement Pvt Ltd, sister concern of RMC group, produces RMC cement from its Simara-based factory.
3. H&B Development Bank
HNB Development Bank is a leading development bank of Nepal that has a “B” class license issued by the Nepal Rastra Bank. RMC group chairperson Shrawan Agrwawal is the chairman of the H & B Development Bank.
4. Prudential Insurance Co Ltd
Prudential Insurance Company was incorporated under the Companies Act on November 30, 2000. With the approval of Beema Samiti, it commenced operation on June 20, 2002. The Chairperson of RMC Group, Shrawan Agrawal, is in the Board of Directors of the Prudential Insurance Co Ltd.
5. Palpa Cement 
This is the mine based that will to produce clinker and cement. The factory will come under operation soon.
Details of major products of the RMC group:
RMC Cement
The company has a production of RMC Cement from its factory that has a capacity of 2.4 million bags a year. The company has installed the latest PLC controlled closed circuit technology to ensure high quality and strength in the cement along with the installation of latest technology for the pollution control. It has also established fully-equipped modern quality testing laboratory to test the raw materials and finished goods at all stages.
MS Black Pipes
RMC has been manufacturing and supplying MS Black Pipe through its Birgunj based factory. It has the production capacity of 30 thousand tons per annum.
Galvanised Iron Pipes 
The RMC Metal Craft Pvt Ltd also manufactures galvanised iron pipes. These are made from steel or iron pipes coated in molten-zinc.
Color Coated Sheets 
The RMC Pvt Ltd has begun manufacturing and supplying the color coated sheets from last two weeks and it has the production capacity of 18 thousand ton per annum.
CR Sheet
The production capacity of CR sheet is 30 thousand ton per annum.


Good Governance And Friendly Investment Policies To Drive Nepal Towards Development

Good Governance And Friendly Investment Policies To Drive Nepal Towards Development
–By Sujit Nath
It was a day of pledge reckoning and revolution. Newbiz Conclave & Business Excellence Awards Ceremony-2013 was held on August 24 with an aim to double Nepal GDP growth rate to 7 per cent per annum.
The event was conceptualised with a mission, hoping for a new sun rise and a dream to give Nepal what it deserve in terms of development and good governance.
Amid some of the stalwarts of the industries, chamber of commerce, embassy officials, foreign thinkers and economists, the New Business Age (NBA), The Corporate Weekly and Arthik Abhiyan in association with Asian Paints and other sponsors organized the ceremony and initiated a step toward development under the banner of — ‘Doubling of growth of Nepali economy to 7 per cent GDP: The Roadmap Ahead’.
It was a long brain storming session where excuses, logic and ways to achieve were shared, and views were exchanged among the speakers.
The conclusion was optimistic — Yes, we can achieve it.
All we need, a determination to do anything for this country in bringing FDI’s, training people locally in specialized areas and more focus on Agriculture.
Speaking on the occasion, chief guest Shankar Koirala, Minister for Finance, Industry, Commerce and Supplies stressed for 5.5 per cent economic growth in coming 12 months and said, “Achieving 7 per cent in coming years is not an impossible task. We play blame game and that’s hampering the country. Only effort from the government is not sufficient and we need help from the private sectors to make Nepal a developed country
by 2022”.
“Investment is important for higher growth but private sector is shying away due to lack of investment safety. We have already implemented some of the policies on development and are on the process of implementing few more new foreign policies, which will help us in bringing more investment in Nepal. Let me share that the cement industry is booming in Nepal and in coming years Nepal will be self sufficient in cement. The whole idea is to bring more investment through friendly foreign policies for a healthy GDP growth,”
he said.
Many dignitaries on the ocassion felt there was an urgent need for the farmers to shift from traditional farming to scientific way of cultivation. This is only possible by bringing technologies to Nepal and providing trainings to the local youths so that they don’t go to other countries to earn their bread. This will reduce the import as the country will be self sufficient in food. It will also bring a heave of sigh among the middle class in terms of affordability.
To bring a collective effort for the development of Nepal, a book titled — Nepalko Arthik Briddhi Ek Margachitra (Sambriddha Nepal Abhiyan) was launched by the minister for finance, Governor of Nepal Rastra Bank Dr. Yubaraj Khatiwada, NBA chairman Madan Lamsal, country head of Asian Paints Budhaditya Mukherjee, chairman of NewBiz Awards jury Prabhakar SJB Rana, FNCCI president Suraj Vaidya, CNI founder president Binod Chaudhary and president of Nepal Bankers’ Association Rajan Singh Bhandary.
Among some of the strong views shared by the speakers, Hari Bhakta Sharma, vice president, confederation of Nepalese industries came out with a practical thought on some the basic thing to achieve the growth in this country.
“Nature has a capacity to fulfill all our need but she cannot fulfill our greed. It is sad that the country where I live is 167th poorest in the world because of dollar appreciation. Thanks to the government. We have 2.5 billion people market and still far behind. There is no electricity and water. We only demand with no responsibility,” Sharma said.
He said, “New generation of enterprise is emerging in Nepal. We should try to improve our technology to compete with India and China. Once you learnt that, you will compete with rest of the world. I would like to request the government to change their policies at the earliest and would like to request our skilled manpower not to migrate to other countries. We are sending labour to Qatar because we pay less to them in Nepal. We have to utilize these people to reverse that cycle. My perspective to the business leaders that best resources are here and how much we are ready is a different issue”.
Nepal’s economic growth stood at 4.6 per cent last fiscal year due to favorable weather and also the services sector witnessed a healthy growth. However, in the current fiscal year its economic growth rate is slowed down to 3.5 per cent due to lack of investment, incomplete budget, rough weather etc.
Sharma stressed that there is a need to generate employment and industrial clusters in Nepal and says, “If Morocco can export garments to Nepal, then why can’t we produce garments. In coming days the competition is global not regional and we need to change our policy. A regular co-ordination with the government is also become very important”.
The view of 15 speakers including six foreigners zeroed down to some of the basic areas to achieve 7 per cent GDP includes reducing import, investing whatever resources available in Nepal, utilizing local people, improving Agriculture investor friendly policies, stable government and preventing corruption.
Dr. Yubaraj Khatiwada believes that agricultural and service sectors are some of the key drivers of growth and it has a capacity to grow by five and seven per cent respectively. “We need a common economic agenda to grow further,” he said.
The business conclave ends with a thundering applaud and left many foot prints behind with a dream to drive Nepal towards development.

Bodde Stresses In Improving Nepal’s Economy

US Ambassador to Nepal Peter W. Bodde stressed the need for business leaders to work with political leaders to develop an agenda for improving the economy of Nepal. He made the remark during his visit to Nepalgunj on August 16. According to a press statement by the US embassy, Bodde met with  local government officials, business leaders and NGOs representatives.
Bodde visited USAID’s Sajhedari project, a new $25 million five year programme. The project funded by the USAID is targeted to promote inclusive, participatory, and effective community-level development. He also met with NGO groups conducting U.S.-government funded anti-trafficking efforts in the region.  In his meeting with the District Election Officer, Ambassador Bodde was briefed about preparations for the November elections.
In his remarks to the Nepalgunj Chamber of Commerce and Industry, Ambassador Bodde  “For Nepal to reach its potential it must have a political system that represents Nepal’s diversity.  Holding free, fair, credible, and inclusive elections is a crucial first step,” he said.

Nubiz Publications on your mobile

Following are the SMS keywords for getting our news headlines on mobile. Type the following keywords on your mobile and get the news headline on your mobile as SMS.


Nubiz Publications News Keyword Notification, type ‘nubiznewskeywords’ and send it to 2233

For New Business Age SMS Headlines, type ‘nbanews’ and send it to 2233, The Corporate SMS Headline News, type ‘tcnews’ and send it to 2233

Abhiyan SMS Headline News, type ‘abhinews’ and send it to 2233, you need to install Nepali Unicode on your mobile






Necessities Of Commercial Bench

Shreekant Poudel Is the spokesperson of the Supreme Court. In an interview with Britant Khanal of The Corporate weekly he shed light on the introduction of commercial bench and its need. Excerpts:
Could you highlight the reason behind establishing the commercial bench?
The first and foremost reason behind the establishment of this bench is the need for speedy justice, easy access and quick legal remedies for the commercial sector. Even more important is the demand made by the law in many acts after the second Jana Andolan. It is clearly mentioned that such and such cases will be dealt by the commercial bench like for instance in Section Z8 of the Company Act. After 2006, the World Bank had also suggested the requirement of such a bench. The Company Act, the Secured Transaction Act and other acts related to safe competition have mentioned the requirement of this bench. Was this issue initiated by ADB? I don’t think so but the ADB had some general interest and it had recommended on bringing such a bench too.
What new prospects will the bench bring? Will it have the same old practices disguised as new?
In the process of establishing this bench we had to and we still are training judges, judicial staffs and even lawyers. The training lasts from one to one-and-a-half months as per requirement. The judges who attend the training are only sent to the bench for hearing commercial cases. The new commercial bench will therefore slowly shed some old ways.
There seems to be a paradox in the bench being established for the benefit of the commercial sector while the jurisdiction seems a bit scattered, vague and ambiguous. Could you talk a little about this?    
We are still in the starting phase of establishing the bench. As per my knowledge, the initial requirement was that of a separate commercial court which came down to establishing a commercial bench in appellate courts. This was required because cases related to the commercial sector are heard in a scattered manner. For example, cases of contract are first heard by the district court, that of patents are heard by the department of industry, and many cases are addressed by the Nepal Rastriya Bank (NRB) too. Therefore, a common institution to streamline all commercial cases and bring them under one umbrella seemed to be necessary.
Home work is yet to be completed. It was rightly questioned whether or not offences in banking will be dealt by the commercial bench. The issue is still subject to research and analysis. There are other issues also like that of intellectual property and cases of revenue tribunal. So there is a lot to be done and we are striving to bring all of these cases under the commercial bench.
Has the bench been established in all appellate courts in the country?
No, we have not established commercial benches in all appellate courts as they are established in a need-based manner. The previous chief justice had recommended the bench to be established in six places including Pokhara but later it was only established in four places. We therefore have established this bench in five places, Hetauda being the youngest which was established two years back and the other four are Biratnagar, Hetauda, Butwal, Nepalgunj and Patan.
Cases Regarding Commercial Bench
Gandhi Pandit Advocate
Gandhi Pandit

‘We are still at the initial stage’

What is your take on the commercial bench?
The judges must be competent to look at all kinds of cases, but frankly, that is not possible all the time because of growing trade issues in the domestic and global markets and because some of the cases are so sophisticated that they require specialised knowledge and high expertise is not available in the country. Smooth functioning of the economy will require a better legal system which will support rapid growth and development. Therefore, the present context demands a commercial bench to go in hand in hand with the pace of development in order to be able to forge a conducive environment for global as well as domestic investors. 
Where can we trace the footprints of this system?
This system can be traced to the continental legal system, commonly understood as the French and German legal system. In these systems, we can see the trends of a commercial tribunal, a labour tribunal, an industrial tribunal, among others. In these kinds of tribunals the specialised skills of various sectors are brought for the better understanding of the case. And this system was later followed by Britain and the United States of America. Therefore, this pragmatic approach has led to speedy justice and quick legal remedies in these nations. But in our context, we are still lagging behind. Our judges are still traditional and are only specialised in traditional issues such as cases of land dispute, writ petition, etc. whereas we don’t have expertise on cases like letter of credit, IT law, intellectual property law, cases of trademark and so on. 
What could be the possible remedy to such lacunae and paralysis?
Establishing the bench is one thing and effectiveness is another. As judges are frequently transferred to places without access to such knowledge, they will require training, and attending the training once will not make an impact as there has to be periodic training which we are lacking. Therefore the national judicial academy has been training judges but in the same traditional cases only. Not enough training has been provided in the field of modern commercial issues. Another major problem is procedural delay. These kinds of hurdles will further delay justice and so they will have to be reduced to a minimum. Such deficiencies in the system will give a very wrong message to foreign investors.

A Leading Chain Of Hotels In Nepal Grows Bigger

–By Gaurav Aryal
Rajan Sakya CEO, KGH Group
Rajan Sakya
CEO, KGH Group
The KGH Group has recently revamped rooms and interiors of its signature hotels, Park Village Hotel and Resorts and Kathmandu Guest House. According to Rajan Sakya, CEO of KGH Group, 60 rooms of five-star facility were added on each hotel in the year 2012. Sakya says that rooms were upgraded in accordance with the demand of clients and growing competition to offer quality service.
Renovation work is also ongoing at Aqua Buzz Unlimited, a hotel located in Koshi. Sakya admits that the hotel is not doing impressive business at the moment but he is optimistic that Koshi will emerge as a tourism hub when the Banepa-Bardibas highway gets completed in the next two years. He says that the highway will shorten the distance between Koshi and Kathmandu and will increase tourist flow to the area.
Expansion Plans
The KGH Group plans to add new properties to business in the years to come to their current line-up of eight hotels and three travel agencies. According to Sakya, the group is planning to establish two new hotels within the next two years. He says one will be in Kathmandu while the other will be in Koshi.
Karna Sakya, Founding President of the group wishes to see the business he established to be passed on to the future generation. Rajan Sakya, his youngest son also expresses commitment to continue the business and says, “Tourism is the industry where we have expertise and long-time experience. The next generation will also be involved in the same field as we do not have any plans to venture into any other sector.”
When making plans for the future, young Sakya says that the overall business climate of Nepal makes it difficult to make long-term plans. So, he says the group has been only making plans for the short term.
Sakya reveals that the group plans to streamline and standardise the quality of its services offered throughout the properties of the group as well as its management style. For this purpose, he says, the group is adopting a corporate model of running business that will centrally control all sister concerns it owns.
Clientele and Occupancy
The morale of tourism entrepreneurs is getting a boost with the rise in tourist flow after the insurgency. Sakya is also content with the number of clients his chain of hotels has been able to attract. He says that the occupancy level has been satisfactory throughout the year.
According to Sakya, Park Village Resort is primarily targeting conferences and seminars, and so 60 per cent of its clients are Nepalis while the rest are foreigners. Similarly, guests at the Kathmandu Guest House are mostly adventure tourists and it is an all-season hotel with 100 per cent foreign clients. Likewise, 80 per cent of clients at the group’s hotels in Pokhara, Chitwan and Lumbini comprise of foreigners.
Management strategy
The KGH Group has been operating under the family business model since Karna Sakya ventured into the tourism and hospitality sector almost 48 years ago. “We are not running our business similar to a professionally managed five star hotel.  Though we have professional hotel managers to look after a particular hotel, we have shouldered the responsibility of running the business and we are happy with this style because we believe we have the expertise and experience of several decades,” explains Rajan Sakya.
The Sakyas, however, are planning to corporatise the group in the next one to two years. The group plans to set up a corporate head office in Kathmandu with a team headed by a General Manager. Sakya says that the corporate office will centrally control the accounts, internal audits and central purchasing. “This model is being adopted to standardise the quality of services and products used across all the properties under the group,” he says.
Human Resource Management
The KGH Group has not only created employment for 650 to 700 people but also has been meeting a social responsibility in hiring employees. Sakya says that the group hires women under the shelter of Maiti Nepal, a non profit organisation dedicated to help victims of sex trafficking. As women from the organisation find it challenging to reintegrate into society after being rescued from brothels, the KGH group has tied up with Anuradha Koirala (Founder and Director of Maiti Nepal and also a winner of CNN Heroes of 2010) to provide them with job opportunities in all of its properties, says Sakya.
Similarly, the group prioritises hiring employees from underprivileged groups and communities. Sakya says that the group gives preference to those who have returned after working abroad. He gives an example of a recent recruitment of 10 employees who had returned from the US and the UK. He also reveals that the employee turnover at the group is quite low and some of the employees have been with the company for even decades. “We have maintained a very good relationship with employees and so, we do not have problems with the human resource management,” he states about the company’s relationship with its employees.

The KGH journey
The journey of the KGH Group began when Karna Sakya, Founding President of the group established Kathmandu Guest House in Thamel, 48 years ago. Sakya recalls that Thamel was nothing more than a paddy field then. Thamel, the tourist hub of today grew around the hotel which started with 13 rooms.
Sakya, a government employee then, used to work at the department of forestry and was not satisfied with the working environment.  Brought up in an affluent family, he never felt that he had to take up a job to make his living. A traveller himself, he says that one must be able to comprehend what tourists want in order to run a tourism business and adds: “Tourism is a business of dreams and only a dreamer can delve deep into this sector.”
His expertise as a forester and environmentalist is reflected in the hotels of the group. He has always prioritised the harmony between buildings, nature and the culture of the locality where the hotel is built and it can be witnessed in any of the sister hotels of the group. Sakya says he never developed a property on a leased or government land and all land where hotels are built is owned by the group.
When the country was at the peak of insurgency, the group never took a break. Rather it expanded into new projects and purchased land that helped it achieve success that it had never seen earlier.
Today, the group has eight hotels and three travel agencies and is about to mark its golden jubilee in two years’ time

Signature Hotels of the KGH Group

Park Village Hotel and Resort
Park Village Hotel and Resort
This hotel spreads over 55 ropanis of land and is nestled in the foothills of Shivapuri National Park. Located just seven kilometres away from the heart of Kathmandu city, the hotel is so close to nature that it is regarded as a hotspot for bird watching, gorgeous scenery and harbours over 78 species of 3000 flowering plants. The hotel primarily targets conference clients and has seven conference halls and parking space for 80 vehicles. Similarly, it has 135 rooms, suites and service apartments of five star categories, swimming pool and spa among other luxurious amenities.
Kathmandu Guest House
Kathmandu Guest House
Kathmandu Guest House is the second largest hotel of the group that also preserves the architectural grandeur of a Rana palace intact along with ultra modern facilities. The hotel named one of the 300 most popular icon hotels in Asia by the Inside Guide in 2003 is famous among adventure tourists, writers, musicians and artists travelling Nepal. The hotel located at the heart of city, Thamel, has 150 rooms that cost from USD 30 to USD160 per night. Recently, the hotel has upgraded its rooms and interiors keeping the elegance and history of its architecture alive.
Waterfront Resort
The resort located on the banks of Fewa Lake in the popular tourist destination, Pokhara, is spread over 15 ropanis of land. The company claims that it is one of the best eco friendly hotels in Pokhara. The resort even has a rain harvesting system and waste water is recycled to be used in its gardens, according to the company. One of the newest ventures of the KGH Group, the resort offers unparalleled views of the lake and mountains. The resort with 60 rooms also offers a peaceful and homely environment.
Buddha Maya Garden Hotel
Buddha Maya Garden Hotel
The hotel is located just five minutes from the birth spot of Lord Buddha in Lumbini. The hotel spreads over nine bighas of land and has its garden full of indigenous Buddha era trees. Founder of the group, Karna Sakya’s expertise in forestry and environment has inspired the landscape of the hotel in marrying art, culture and nature. It is one of the largest hotels in Lumbini with three and four star quality rooms.
Maruni Sanctuary Lodge
Maruni Sanctuary Lodge
Established in 2004 with 11 cottages, the hotel has now expanded into 37 huts. The hotel nestled on the edge of Chitwan National Park and just 10 minutes walk from Sauraha. All rooms are decorated in a unique traditional architecture with bamboo furniture, terra-cotta flooring and colourful ethnic Tharu paintings. The hotel also has its own wetland that attracts migratory birds, making it ideal for bird watching.

Microfinance Stretching Arms In Financial Market

–By Sanjeev Sharma & Yagya Banjade


Nepali Microfinance Institutions (MFIs) have been witnessing a sharp inflow of investment in recent months. Since the inception of Nirdhan Utthan Development Bank as the first MFI in the Nepali stock market in 2011, shares of such companies have been following a bullish trend. The continuous rise in the share price of MFIs listed in Nepal Stock Exchange (NEPSE) is seen to be the main causative factor.

The attraction of MFIs among investors is being caused due to various reasons. Experts share mixed viewpoints on this. According to some analysts, the below Rs 500 per share price level of a majority of listed microfinance banks is a main driving factor. Others point out to the loose policy announced by Nepal Rastra Bank (NRB) regarding MFIs in the monetary policy for the current fiscal year.

“Investing in MFIs is considered secure. Microcredit banks can commence their business with small amounts of capital and have less liability compared to larger financial institutions,’ said Dharmaraj Pandey, CEO of Paschimanchal Gramin Bikas Bank. “Due to this, investment in MFIs carries less risk, giving good returns.” Similarly, the fast-paced growth of the microcredit market and increasing investment of microfinance banks is also fuelling investor’s attraction, according to Pandey.

Anjanraj Poudyal, former Chairman of Stock Brokers Association of Nepal (SEBAN) also agreed with Pandey. “The number of MFIs listing in the stock exchange having competent promoters has significantly gone up in recent years which have helped attract more investment in this sector,” Poudyal said. According to Poudyal, investment is coming from individuals as well as institutions. “Some mutual funds are giving high priority to the shares of microfinance banks in their portfolio,” he mentioned.

Investors are looking optimistic about their investments in MFIs. “The directive given by NRB to banks and financial institutions for loan expansion to the impoverished people is ascending the demand of MFIs shares in the market, however the equilibrium of such demand and supply is not well balanced,” mentioned an investor in the condition of anonymity. “The earning per share (EPS) of many microfinance banks is better than some commercial banks,” he added.

According to official data, 31 microfinance banks, 15 microcredit co-operative and 31 microcredit non-government organisations (NGOs) are actively providing services throughout the country. In regard to this, the number of MFIs in stock exchange is gradually rising. The total number of shares of 11 microfinance banks listed in NEPSE reached 273.638 million towards the end of Shrawan. Out of the listed 11 banks, share transactions of three companies have been held back due to various reasons.

‘Different category for MFIs in NEPSE needed’
Microfinance banks are placed in the development bank section of the NEPSE index. However, with the rising number, voices are being raised to separate microfinance banks from development banks in the share index. “As the listing is constantly rising, separate group is needed for effective management of microcredit banks in the share index,” SEBAN’s former chairman Poudyal said.

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