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August 2017 Cover Story

Published on: 2017-08-20 11:37:16     1222 times read    0  Comments
The Robust Business of FMCGs

FMCG sector has championed the Nepali manufacturing establishment. Now with the right set of policies and an environment conducive to business, Nepali FMCG brands aim  high to take on the international market.

--BY KRISHANA PRASAIN

The business of fast moving consumer goods (FMCGs) is growing at a remarkable rate in Nepal. From urban to rural areas, the market for food and non-food consumables, or FMCGs, has expanded across the country over the years clearly indicating the growing spending capacity of Nepali consumers led by the inflow of remittances and increasing economic activities. With the population nearing the 30 million mark, Nepal has become a lucrative market for numerous domestic and foreign FMCG brands. “The growth rate of the overall FMCG market is in double digits,” says GP Sah, Vice President and Global Business Head of Chaudhary Group’s FMCG division. Similarly, Parash Shakya, Executive Director of Bhuramal Lunkarandas Conglomerate (BLC) estimates the domestic FMCG market is growing by around 5-10 percent every year.  The Manufacturing Sector Profile 2017 published by the Investment Board Nepal (IBN) puts the growth of the sector to be around 20 percent annually. 

The manufacturing sector leader
Despite the serious setbacks to Nepali industries over the last several years primarily due to prolonged political instability, labour issues and energy shortages, FMCG has emerged as the biggest saviour of the domestic manufacturing sector. According to the IBN’s Manufacturing Sector Profile 2017, the FMCG sub-sector currently has 59 percent of the GDP added value in the country’s manufacturing sector followed by industrial goods at 38 percent and consumer goods at 3 percent. IBN notes that Nepali FMCG producers mostly produce packaged foods, spirits, alcoholic and non-alcoholic beverages, dairy and confectionary products, tobacco products, laundry and toilet soaps, detergents and toiletries. Besides these, companies here also produce paints and personal care products in the FMCG segment.  

Major market factors 
Growing consumer awareness, easier access to products and changing lifestyles have been the key growth drivers for the consumer market. “Kathmandu Valley accounts for 45-50 percent of the overall market for FMCGs,” says Shakya. 

For Rahul Bagga, Legal Counsel and Head-Corporate Affairs of Unilever Nepal Ltd (UNL) the key factors for the market growth of FMCGs are right set of distribution, market penetration, growing economy and the rising purchasing power of consumers. 

“FMCG is an exciting category. FMCGs have become key ingredients of our daily life,” opines GP Sah. “The present day consumers have a wide choice in selecting the FMCGs and the manufacturer are making good profits from these products,” he notes. 

The FMCG industry primarily deals with the production, distribution and marketing of consumer packaged goods (CPGs) which are normally bought by consumers on a regular basis. The modern day marketing concepts identify products in three main categories as consumer goods, durable goods, non-durable goods and services.

Sah correlates the income growth of consumers of the lower and middle classes as the main factor for the increasing demand of FMCGs.  “Many FMCG products are somewhat essential in nature, particularly the products with market brands. All FMCG companies in the country are doing very well,” he says. 

Abhaya Prasad Gorkhaly, Senior Manager of Marketing at Dabur Nepal sees the FMCG market as relatively stable unlike gadgets, consumer durables, automobiles, real estate that are dependent on macro-economic indicators. “Consumers will use the necessary FMCG products regularly. The fluctuation in income of consumers generally does not matter on buying necessary FMCG products,” he says.  

According to him, there is a stable and steady growth in the domestic FMCG market. “There is no big fluctuation in the FMCG market. Different FMCGs have different growth rates based on their market demand,” he expresses.     

The consumption pattern
Consumer spending is what keeps the economic wheels of countries rolling in the modern age. Though the exact statistics on FMCG spending of Nepalis is not available, the pattern of consumption expenditure suggests that consumers here have been spending a lot more on FMCGs in recent years. This pattern has been driven by a growth in income followed by strong inflow of remittances as well as rising economic activities in the country. 

Nepal’s GDP per capita Purchasing Power Parity (PPP) has reached USD 2,642 in 2017, up USD 539 from USD 2,103 in 2012. According to the Annual Household Survey 2015-16 published by the Central Bureau of Statistics (CBS), Nepalis spend over 85 percent of their income on consumption yearly. As per the report, per capita income of a Nepali reached to Rs 80,921 in FY 2015/16.

The CBS report shows that the per capita consumption spending of each Nepali has reached Rs 70, 680 in FY2015/16, up 8.8 percent or Rs 5,739 from Rs 64,941 in FY 2014/15.  On this basis, Nepalis are spending 24 percent of their daily income on consumption goods. As per the survey, the per capita consumption expenditures in urban and rural areas stand at Rs 101,659 and Rs 52,007 respectively.

In the meantime, the total household expenditure in Nepal has reached Rs 1,825 billion in FY2015/16 which was Rs 1,622 billion in FY2014/15. Likewise, 53.8 percent of the total expenditure of Nepali households is on food items while 46.2 percent goes to non-food items.

The survey finds that urban households in Nepal spend more on non-food items than food items. According to CBS, spending on non-food items and food items accounted for 55.1 percent and 44.9percent respectively of the total spending of an urban household. It is 40.2 percent and 59.8 percent for a rural household. 

The Fifth Household Budget Survey published by the Nepal Rastra Bank (NRB) in 2015 also shows Nepalis spending more on FMCGs. 

 “In a country where urbanisation is taking place rapidly and where rural demand is set to increase with rising incomes, FMCG is an attractive sector for investment, particularly for quality products and products specifically created for rural markets,” reads the IBN report. 

The market majors
From noodles to nail polish, a vast number of FMCG brands in food and non-food items of local, regional and multinational producers are present in Nepal under a wide range of categories. Most of the companies and business groups large and small are engaged in various activities ranging from production of their own FMCGs and trading of imported products. To name a few, Chaudhary Chaudhary Group, BLC, Sharda Group, Khetan Group, Kedia Organization, TM Dugar Group and Laxmi Group have been producing a wide range of food items and beverages. Similarly, Jawalakhel Group of Industries and Nepal Distillers have specialised in the production of different types of spirits and liquors. Meanwhile, Dabur Nepal and Unilever Nepal are the two multinational companies that produce and distribute FMCGs in the country. 

Some of the signature home-grown brands are Wai Wai, Nepal Ice Beer, Rum Pum, Pashupati Biscuits, Kawality Biscuits, Choco Fun, Ruslan Vodka, Nebico Biscuits, Khajurico and Gorkha Beer. Similarly, foreign brands such as Coca-Cola, Tuborg Beer and Carlsberg Beer (Khetan Group), Pepsi (Varun Beverages) and various FMCGs of Patanjali Ayurveda are produced and sold here through joint ventures. Meanwhile, a large number of foreign brands owned by global and regional Indian producers such as GlaxoSmithKline, P&G, Nestle, Johnson & Johnson, Colgate-Palmolive, L’Oreal, Kraft Cadbury, Mars, Ferraro, Red Bull, Cavincare, Godrej, Emami, Himalaya Herbals, Haldiram’s, Patanjali Ayurveda and PRAN have a strong presence in the market through their distributors in Nepal. 

Similarly, United Distributors Nepal of Vishal Group, Nepal Overseas Marketing Company, SPG Trading of Sharda Group and Kedia Organization’s Kanak New Traders are among the country’s largest importers and suppliers of these off the shelf products. Such groups have a strong grip over the countrywide distribution of various foreign FMCG brands. Likewise, retail chains such as BhatBhateni Super Market (BBSM) and Big Mart are among the biggest FMCG retailers in the country. FMCGs account for almost 70 percent of the items sold by BBSM. According to the company, it imports 22 to 25 percent of such products from India, China, Europe, Australia and other countries. The nine-day sales data of some major consumables provided by BBSM shows a glimpse into the demand for FMCGs in the country. 

Import and Export
Nepal imports FMCGs worth billions yearly to meet the demand of the domestic market. According to data provided by the Trade and Export Promotion Centre (TEPC), the import of products including soaps, toothpaste, shampoo, tobacco, liquors, beer, bottled water, non-alcoholic beverages, fruit juice, sweetened biscuit, processes food, sugar confectionery, chocolate, coffee, tea, mate, deodorants, perfumes, cosmetics, coconut oil, rice, wheat flour, sunflower oil and soybean oil amounted to Rs 45.20 billion in FY2015/16. 

TEPC data also shows that Nepal exported products including soaps, shampoo, toothpaste, mineral water, snacks, juices, processed foods, coffee, tea, mate and spices worth Rs 13.06 billion to different countries including India, China, United States, Europe, Russia and New Zealand in the last fiscal year.

Observing the lucrative opportunities, Nepali producers in recent years have stepped up in order to boost their exports to the global market. Dabur Nepal has been exporting large amounts of juice to India and sometimes other countries as well. “We are the biggest supply source for our parent company in India,” mentions Gorkhaly. 

Through its trading arm CG Exim, CG is also in the export and import of FMCGs. The group exports products like noodles, snacks and beer to different countries. “We are using this unit more as a wing to learn how to step into new business categories. Our ultimate aim is to set up factories observing the market of the products that CG Exim imports,” states Sah. 

BLC is also planning to export its FMCGs. “We are doing R&D on our Lito product,” mentions Shakya, adding, “We are trying to come up with herbs and Himalayan products that have huge demand in foreign markets.” BLC is also planning to tie-up with international companies to boost its efforts in the FMCG sector. 

Meanwhile, Asian Thai Foods has also been exporting noodles to India, other SAARC countries, US and Middle East nations.

Heated market competition
There is tough competition in the domestic market as a result of the changing preferences of consumers. FMCG producers take the competition as a key market moving factor. “Competition is something that we love,” says Gorkhaly. “Competition keeps us awake and motivates us to come up with better products,” he adds. “Brand building is about understanding the consumers’ insight, cater their needs and delight them with quality products so that they will become loyal towards your products.” 

Bagga of UNL finds the market competition to be quite aggressive. According to him, the company values fair competition and is always ready to compete across all categories. 

 Sah of CG does not see competition as an issue as long as there is a stable government policy and an environment conducive to export. He says that CG is ready to compete with any multinational FMCG producer. “We have the infrastructures, technological know-how and management capabilities to compete with any MNC,” he states.

Shivakoti of ABC expects growing market competition in the biscuit segment in the upcoming days. “Market competition will be high as international biscuit brands are opening their plants here,” mentions Shivakoti. “We are competing with domestic biscuit brands like Nebico and Britannia, Parle and Patanjali are our international competitors.”

Product Innovation 
The rising demand and increasing competition has bolstered product innovation in the domestic FMCG sector. BLC, for instance, has been producing the Sarvottam High Energy Biscuits. Developed by the conglomerate’s Instant Meal, the high-end biscuit brand is manufactured by Shree Pashupati Biscuits. Dabur PROstyle men’s hair oil is another example. “We introduced the hair oil brand five years ago. It was developed in Nepal targeting the domestic consumers,” informs Gorkhaly. Likewise, the classic Dabur product Hajmola in the Nepali ‘Lapsi’ (Hog Plum) flavour introduced two years ago is not available in any part of the world. 

CG has surged head in terms of product innovation over the years.  Wai Wai, for example, is now available in 15 different varieties after its market inception 33 years ago.  According to Sah, CG has plans to enter some new categories in the food and beverage segments. The company currently is working on additional fruit juice categories and also in the mixed spices business. “We will be launching our new products next year,” he says.   

Dabur Nepal has also been working on new products. “We will be launching one or two products by next year among the ten products that are in our pipeline,” mentions Gorkhaly.  Similarly, BLC has also some products lined up for market launch. The conglomerate plans to launch cereal foods for elderly people. “We will be introducing new products in our existing dairy, cereal food and biscuits segments,” informs BLC director Shakya.  

Meanwhile, changes are also visible in the domestic liquor market. Craft or draught beers have become a new favourite among Nepali beer drinkers in recent years. Introduced in 2015, Kathmandu Premium Lager produced by Himalayan Brewery has become a popular craft beer brand in Nepal. Sherpa Brewery has also earned a reputation for its Khumbu Kolsch Craft Beer due to its distinctive taste. Established in 2015, Nepal’s first craft beer company is preparing to launch a red ale beer under the brand name Himalayan Ale soon.  Innovation in product design, packaging, marketing and distribution has led Yeti Distillery to become a market mover in a relatively short period of time with its 8848 Vodka, Old Durbar, Old Durbar Black Chimney Blended Reserve and Old Forester whiskeys and Abominable Snowman Gin. The launch of Bio Whiskey and Bio Vodka in 2013 by Bio Tech Spirits Nepal, a franchise of Bio Tech Spirits, India created a buzz in the market due to the unique blend of herbs and alcohol in a drink. 

New investments 
New investments are being added to the existing FMCG businesses and new companies are entering the market. Raj Brewery, a part of Jawalakhel Group of Companies (JGI), has invested around Rs 3 billion to setup a plant at Bhairahawa to produce the Warsteiner Premium German Pilsener beer. Apart from the international expansion, CG is also aiming to further strengthen its domestic FMCG business and create new jobs. The group in March this year shared plans to invest Rs 800 million in Wai Wai plants in Nawalparasi and Sunsari, Rs 1 billion in CG Brewery, Rs 250 million in a Rio juice plant at Nawalparasi and Rs 200 million in CG Packaging. 

Nepal has no major FDI in the FMCG sector apart from Dabur Nepal, Unilever Nepal and Surya Nepal. However, the sector has been gradually attracting big foreign investors lately.  The Indian food products corporation Britannia Industries Limited a few months ago obtained permission as a 100 percent FDI entity from the Department of Industry to invest Rs 1.11 billion to establish a biscuits and bakery products factory at Simara with an annual production capacity of 14,000 tonnes.  

Late last year, Patanjali Ayurveda in a joint venture with Nepali business tycoon Upendra Mahato commenced a new factory at Bara with an initial investment of Rs 1.6 billion to produce 55 types of FMCGs including food and cosmetic products. 

 Problems and prospects
The Nepali FMCG sector faces a number of problems limiting its scope as a potential area of investment despite the opportunities. Bagga of Unilever Nepal says, “Nepal is a highly regulated economy where several restrictions on foreign investment in the retail segment and imports have been imposed.” According to him, this has resulted in constraints in terms of introducing new categories or products. “Poor bureaucracy, unstable government and strikes are the factors that result in market instability,” he adds. He also says that the existing laws and policies are not up to the mark and can be manipulated easily by the bureaucrats. The widespread availability of spurious products locally has been another area of concern in the sector. There is rampant copying of brand names and packaging of the products of MNCs and big domestic producers that creates confusion among the consumers ultimately leading to foreign investors shying away from investing in Nepal.  

It is basically due to the absence of stringent IPR laws, say experts. John Hellman,  vice-president of consulting firm Bower Group Asia (BGA) during his visit to Nepal in May told New Business Age that the existing taxation system and issues related to IPR have held back many client companies of BGA who are willing to invest in the Nepali FMCG sector. 

Sah of CG blames the lack of proper transport and other necessary infrastructures and instability at the policy level for the lack of forward movement in the FMCG sector. But he hopes for a better future as the country is gradually moving towards stability after the local level elections. 

Gorkahly of Dabur Nepal sees the small size of the market as a problem particularly for innovating new products. “Investments go up as new plants need to be added for manufacturing.  But due to the small market, the commercial viability of new products diminishes,” he says. 

Gaurav Sharda of Sharda Group thinks that the government needs to think more carefully and thoughtfully while setting excise and customs duty in the production and import of alcohol. “We cannot sell our products in areas near the Nepal-India border because of the availability of competitively priced Indian brands,” he says. He suggests a strict control mechanism to deal with rampantly available home-made cheap spirits. 

Despite the problems, all agree that the future prospect of Nepal’s FMCG sector is bright and if the right policies are introduced and implemented the industry will continue to be the backbone of the country’s manufacturing establishment providing employment to a large number of Nepalis and a major earner of foreign currency through exports and FDI

Overview of Some Nepali FMCG Majors

CG FMCG
Started as a textile trading business by Bhuramal Chaudhary around 1933 and established by his son Lunkaran das Chaudhary in 1968, Chaudhary Group (CG) is the largest business conglomerate of Nepal operating over 45 companies in the country with and investment outlay totaling USD 1 billion. FMCG has been a core area of business for CG with the group being the market leader in the noodles segment. Its FMCG business host a number of companies namely, CG Foods (Nepal) and its unit Gold Beverage Nepal, CG Beverage, CG Brewery and CG Packaging. The group also has CG Exim (Nepal) as the trading arm to export and import of the FMCG products. Established in 1984 as Nepal Thai Foods, CG Foods (Nepal) is the market leader in precooked noodles category with the iconic Wai Wai brand.  The company has two manufacturing units located in Kathmandu and Nawalparasi having the capacity to produce 1,350 packets of noodles per minute. Wai Wai is also the first Nepali international noodles brand which is manufactured in India as well where the company has eight manufacturing plants. The company’s product portfolio includes a variety of brown and white Wai Wai noodles, a variety of snacks (Kwiks Cheese Balls, potato chips) and confectionaries (Zoom Wafers). Besides the noodles and snacks, the group also produces a wide variety of fruit juice, beer and bottled spring water respectively in Rio, Nepal Ice and Thirst-Pi brands. Meanwhile, CG’s FMCG business also expands to the production of cigarettes and packaging items for its own FMCGs and external clients. 

 “We command almost 50 percent share in the domestic noodles market. The annual turnover from Wai Wai roughly stands at Rs 6 billion at present,” says Sah. The company has a 40 percent market share in the snacks segment. “We are the largest player in the snacks category,” he claims. Similarly, the company holds a market share of around 25 percent in the beer segment. Despite the successes in the major FMCG segments, the company is yet to achieve the same milestone in the tobacco business. “We are not a significant player in the tobacco segment. However, we are trying to make headway,” Sah mentions. 

After years of big successes in the Nepali market, CG over the last few years has been striving to grab the opportunities in the global FMCG market looking to become the first Nepali multinational. The group has moved ahead with aggressive expansion plans in the Indian market with its signature Wai Wai brand. The noodles brand has been steadily gaining popularity in India where it entered in 2003. The share of Wai Wai in the Indian noodles market is presently said to be 27 percent which makes it the second largest noodles brand there after Nestle’s Maggi. CG in January 2017 announced it will invest INR 2.5 billion to open quick service restaurants in a bid to expand its market presence throughout India. Similarly, the group early this year announced its market foray in Europe by opening its first noodles plant in Siberia. In August 2016, CG revealed its plans about establishing a Wai Wai plant in the United States. 

“We are trying to expand in global market.  We will be present in every continent of the world,” mentions Sah. According to him, the company’s plant in Siberia will start producing Wai Wai noodles from next month. “In Africa we are in the advance stage and we are exporting our products to US,” he shares, adding, “For US, the plan has to be commissioned, our sales has to reach a critical mass. We are working on how fast we can achieve there.” Likewise the company has also plans to set up a factory in Sunsari. 

Sah says that CG is the first company to start the fortification of its modules in Nepal in the last 10 years. “As Wai Wai noodles is consumed by all age groups, we thought of adding some fortification on it and we are pioneer in this regard,” he states. 

Unilever Nepal (UNL)
Unilever Nepal is the Nepal wing of the Anglo-Dutch FMCG multinational Unilever. The company started its manufacturing activities in Nepal with the production of detergent powders in 1994.  Having its production unit in Makwanpur, UNL has a wide ranging line up from personal care to cleaning products. It is the manufacturer of a number of daily essential products in personal care, cleaning agents, beverages and food segments namely, Lux, Lifebuoy, Pepsodent, Close Up, Sunsilk, Clinic Plus, Fair & Lovely,  Wheel, Surf Excel, Vim, etc.  

“Nepal presents a unique opportunity for Unilever because having a presence in the country for over 23 years we well understand the market dynamics here,” states Bagga. According to him, UNL commands a 58 percent market share in various FMCG segments. “UNL is leading in almost every category in FMCG,” he claims. There are 235 employees working for the company at present. 

“We value our consumers and therefore our primary focus is to serve them,” he mentions. In terms of product lineup, Bagga informs that the food category is an additional area of focus for the company presently.

Dabur Nepal
Dabur Nepal is the Nepal arm of the Indian natural products major Dabur. It is among the country’s leading companies in FMCG business. Established in 1989, the company started commercial operations in 1992. The company has established itself as the largest producer of ayurvedic and natural health products over the years. The company which had transactions worth Rs 5.3 million in its first year now has annual transactions worth Rs 10 billion in Nepal. The company employs 1,000 people while it provides indirect employment to around 20,000. The company which specialises in utilising local and natural resources has been producing a range of products in health care, personal care and home care segments. The company is the producer of Real Juice, Dabur Chayawanprash, Dabur Red Toothpaste, Amla hair oil, Dabur Honey, Glucose-D, Gulabari, Odonil, among others.

Dabur Nepal’s senior manager of marketing Gorkhaly says that Dabur Real juice is the fastest selling FMCG product of the company. Dabur Nepal holds a 50 percent share of the market in the juice category, according to Gorkhaly. Currently, Dabur Real juice is available in about 26 variants in Active, Burst and Real ranges. He informs that the company produces almost 90 percent of its products domestically. He says that Dabur Nepal is the biggest supply source for its parent company in India in the juice category. “We are a Rs 10 billion company. Our products are exported to India as well,” he mentions. 

Sharda Group
Sharda Group is among the largest Nepali business houses in manufacturing and trading of FMCGs operating since 1970. The group has been producing different brands of noodles, snacks, biscuits and confectionaries, rice, flour and liquors, homecare items and soaps alongside importing and distributing a large number of foreign liquor brands  in the country. 

Sharda Group is in partnership with other business houses manufacturing FMCGs in different segments. Started in 2001, Asian Thai Foods (ATF) is a joint venture of Sharda Group and Jaju Group and has been producing various noodles brands including Rum Pum, 2 PM, Preeti and a variety of snacks. Apart from the nationwide coverage, the products of ATF are distributed in all the major cities and towns in North and Northeast India and also in Bhutan. The company’s share of the domestic noodles market stands at over 25 percent. The two groups extended their partnership further in 2012 with the establishment of Asian Biscuits and Confectionaries (ABC). 

Similarly, Premiere Organics, a JV of Sharda Group and Rathi Group, has been producing Xing Vodka, Old Monk Rum, Royal Reserve 8-Years Old Whiskey and Black Stallion Malt Scotch. Located at Duhabi, Sunsari, over Rs One billion was invested in the company and it has been operational since 2015 employing over 400 people in manufacturing and marketing. Premiere Organics is the largest spirit company in Nepal in terms of production capacity. 

The group’s SPG Trading is the national distributor of French distilled beverages producer Pernod Ricard in Nepal. It has a long list of imported Pernod Ricard brands including Royal Salute, Chivas Regal, The Glenlivet, Aberlour, Strathisla, Longmorn, Ballantines, 100 Pipers, Absolut Vodka, Beefeater Gin, Jameson Irish, Malibu Rum, Kahula Liquor, Martell, G.H. Mumm Champagne and Jacob’s Creek.  “We import 43 brands of products,” informs Gaurav Sharda, Director of Sharda Group who oversees the group’s liquor business. 

“We introduced the 40 UP whiskey Black Stallion three months ago and our recently launched products are available in some parts of the country,” says Sharda. According to him, there are plans to increase the market penetration of the newly launched spirits in the upcoming days. 

Meanwhile, the group’s Nutri Foods produces four types of flour (wheat flour, fine flour, coarse wheat flour and husk) in Fortune, Superman and Anchor brands at Sonapur, Sunsari. It also manufactures the baby food brand LITO. Likewise, its Pashupati Rice and Oil Mills located at Lahan, Siraha has been producing different brands of rice and edible oils for the last four decades. 

In the meantime, Asian Biscuits and Confectionaries has also been strengthening its market presence.  According to the company’s sales manager Tikendra Shivakoti, the maker of Goodlife biscuits and confectionaries has a share of around 12 percent of the domestic FMCG market. Shivakoti informs that the total turnover of the company is Rs 850 million. 

The company has more than 30 varieties in the biscuit and 25 in the confectionery segments. It produces biscuits brands such as Digestive, New Top, Crackies, Treat Cream, Marie, Butter Cookies Rumpum and Magic Cream. Choco Luv, Éclairs, Lotpot, Pop Rock, Frutica, Treat Cream Roll and Goodlife Dairy Milk are among the company’s popular confectionary and chocolate products. 

 “We are the largest Nepali biscuit manufacturers,” claims Shivakoti. He says that the market placement of the company’s products is 35 to 40 percent across the country.  

Bhuramal Lunkarandas Congolmerate (BLC)
Part of the Chaudhary Group, BLC has been active in FMCG business for the last several years. The conglomerate’s area of focus in FMCG at present is in three categories- biscuits, baby food, ready-to-use therapeutic food (RUTF), ready-to-use supplementary food (RUSF) and dairy products. 

Shree Pashupati Biscuit Industries is one of the flagship companies of BLC. Established in 1973, the company is one of the oldest and biggest biscuit producers of Nepal. Churning out 9,000 metric tonnes annually, the ISO 22000:2005 Food Safety and Management System certified company includes over 30 varieties of biscuits in its product portfolio. Soaltee, Butter Cracker, Top, Marie, Bourbon and Lemon Puff are among the popular biscuit brands of the company. 

Pashupati Diets and Foods is another unit of BLC that is focused on producing different types of energy biscuits and cookies. It has products for average to high income consumers. The company over the last few years has been focusing on producing biscuits and cookies in the premium segment. Delight, Delicious and Seasons Cookies are among the major brands of the company. 

BLC is also engaged in manufacturing high quality processed foods with the Instant Meal Pvt Ltd (IMPL). IMPL is the producer of the nutritious baby food Sarvottam Lito along with a range of other fortified blended foods and supplementary foods. The company has been producing fortified blended foods as per the guidelines set by the World Health Organisation. Its brands include Unilito, Nutrimix, Nutrimix plus, Sarvottan Cereal Food, Sarvottam Sprinkles, Sarvottam Jeevan Rakhshak (RUTF), Sarvottam Jeevan Shakti (RUSF), Sarvottam High Energy Biscuits and the low cost supplementary food Champion.  

The conglomerate also operates the Hetauda Dairy Industry (HDI). The company produces 20,000 litres of milk products such as sweetened condensed milk, ghee, pasteurised butter, sugar-free curd, flavoured milk and other dairy items on a daily basis. HDI also supplies its products to other dairy product manufacturers.

 “The Nepali FMCG market has been observing a substantial growth. It is due to the increased spending capacity of the consumers and their knowledge to choose the right products,” says BLC director Shakya. “Our products are very well accepted all over the country. We are hopeful that our product ranges will also be well received in the Kathmandu Valley,” he adds.  Shakya says that the focus of BLC is on providing good food to Nepali consumers at reasonable price points. According to him, the market share of Pashupati Biscuits currently stands at around 10 percent, while the HDI share of the market is about five to seven percent in the domestic dairy products market.

 

Experts Views on Nepali FMCG Sector


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