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June 2016 Corporate Focus

Published on: 2016-06-20 14:31:14     1097 times read    0  Comments
Himal Refrigeration : Expanding Portfolio

--By Archana Prajapati

Vijay Kumar Chaudhary, Executive DirectorVijay Kumar Chaudhary
Executive Director

Himal Refrigeration and Electrical Industries Pvt Ltd, an ISO (9001:2008) certified company established in 1998, is one of the market leaders in the refrigeration and electrical business in Nepal. The company started its operation as a manufacturer of Himal brand air conditioners. Later, it started trading air conditioners of Daikin (Japan) and Fujiaire (Malaysia). The company over the last few years has also been involved in power generator business. It is the authorised dealer of the Indian brand Kirloskar. Recently, the company became the authorised distributor of US brand Jackson Cummins as well. The company has also entered the solar PV systems recently.

Himal Refrigeration provides products as per the demand and needs of its customers. It has various products in its portfolio for residential, commercial and industrial purposes. The company has been supplying wall mounted, ceiling cassette and floor standing air conditioners commercially. Similarly for industrial purposes, VRV (Variable Refrigerant Volume) models are mostly supplied. 

Himal has around 17 years of experience in marketing and servicing of its products while simultaneously implementing Total Quality Management System and its share of the market is also rising steadily. "The company is operating with 89 employees and it has been providing services through 4 branches across the country. We have one branch in the Kathmandu Valley and three outside the capital located at Biratnagar, Chitwan and Pokhara," informs Vijay Kumar Chaudhary, Executive Director of the company.

Product and Services
The main products of Himal Refrigeration are its world class DAIKIN air conditioners from Japan, FUJIAIRE from Malaysia, STULZ from Germany and KIRLOSKAR generators from India.  

Himal Refrigeration claims to be proficient in the installation, repair and maintenance of all air conditioner products, generators and Solar PV systems in households, commercial complexes and medium sized business buildings. The unit capacities range from 9,000 up to 48,000 BTU hours for all split systems and from 9,000 up to 24,000 BTU/ hour for window types. The company is also capable of providing products of unit capacity from 26,000 to 13, 00,000 BTU/ Hour for duct/packed/ roof top type/chiller system and floor standing air conditioning for close control air conditioning. The company is competent in Diesel Generators with all capacities ranging from 2 to 1,000 KVA with water and oil coolant sound proof systems. The solar division is involved in the installation of solar photovoltaic systems ranging from some watts to several kilowatts. The organisation has its own professional team regarding the design and installation of all the systems in the NS approved standard.

Himal Refrigeration started as manufacturer of Himal brand air conditioners. “We have fulfilled air conditioning requirements of various hospitals and their major units including operation theatres, ICUs and CCUs. We have also worked with Nepal Telecom to fulfill its BTS technical requirements,” says Chaudhary. Nevertheless, the business did not go too well as costs of production increased sharply over the time. Also, the entry of cheaper Chinese products into the market left less space for the Himal air conditioners. “Our cost of production was relatively high as all parts had to be imported. Prices of our products were 20 to 30 percent high compared to products available in the market,” he mentions. 

Business position 
“Product wise, it is difficult for other brands to compete with the Daikin brand. Daikin enjoys the number one position in the air conditioner market in Nepal as well as the world,” mentions Chaudhary, adding, "The products of Daikin are durable, efficient, energy saving and they cost less in maintenance.” Similarly, as a distributor of two major generator brands, Himal also holds top position in the domestic generator market. Nevertheless, the company saw its business declining due to the events following the promulgation of the new constitution. The severe supply disruption and acute shortage of fuel which lasted for over four months led to a sharp decrease in the sales of generators. “Last year has been the most difficult time for us. The earthquake, Terai stir and border blockade have taken a toll on us,” recalls Chaudhary. However, after the end of the India imposed economic blockade, the company’s generator business is picking up with the easy availability of fuel. “Now we are back again. Things have returned to normal and the market is showing growth.” According to Chaudhary, customers of Himal Refrigeration are blessed with strong service backup. 

Financial Highlights
Normally, the company’s annual net profit is at 5 percent. It has annual sales of around Rs 170 million. "It is very hard to get, even a net profit of 5 percent because the sector is completely technical which includes engineering work and if the projects are delayed due to minor reasons, the associated costs will be high," says Chaudhary.

The business volume of Himal Refrigeration is increasing. The company has been registering a 15 to 25 percent business growth every year. But due to last year’s events, sales have decreased by around 40 percent. "Our normal sales used to be around Rs 300 million but now, we hardly reach Rs 100 million,” mentions Chaudhary. 

Target Customers    
The product and services are mainly targeted at Hotels, NGO, INGO, hospitals, banks and corporate institutions. The company, for example, has provided its products and services to all branches of Prabhu Bank, Himalayan Bank and Citizens Bank. The company covers around 90 percent in the corporate and commercial segment. The company is also providing its products and services to its customers in Biratnagar, Birgunj, Nepalgunj Bhairahawa and Pokhara.

Market Strategy
The company has been advertising its products and services through different media. It has a marketing department which finds out customers’ requirements. The company takes this seriously and strives to address the various dynamic requirements of the market. "Despite the high associated costs, we have never compromised in quality. Our products used for around 17 years are still giving quality service and there is no negative feedback from the customers," mentions Chaudhary. Similarly, the company has been doing awareness programmes on the quality of its residential products. It is targeted towards customers who are not brand conscious while buying products for residential use. "We believe that customers must not be cheated and they should know about the brands they are buying," says Chaudhary.

Future Plans
The company plans its future course of action as per the developments in the country.  It has plans to come up with new products which will take around eight months to launch.  According to Chaudhary, the company is opening three more branches after a year.

CSR 
The Company is involved in various CSR activities. "Various organisations have honoured our company by appreciating our social contributions," mentions Chaudhary. Similarly, the company has been supporting village communities across the country in coordination with the Lions Club. After last year’s devastating earthquake, the company sent a 20 member team to affected districts to distribute relief materials. “The Company has supportive participation in whichever CSR activities that company participates," adds Chaudhary.

SWOT Analysis

Strength
• Supply of best products in the market
• Focuses on quality of product that gains customers support
• Effective after sales services 

Weakness
• Company needs to develop proper planning
• It has to be more specific to achieve its target
• Deviation in  estimation and actual performance

Opportunity
• Rapid urbanization across the country will help it to gain a further foothold in the market as demand for products increases, believes the company. The company says its programmes create awareness among customers to look for quality products. 

Threats
• Time management 
• Associated costs at times exceed total budget estimation while operating the project


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