20 APRIL 2014 KATHMANDU, NEPAL – As Thousands of Young Nepalese are flying out of country today, Multi-national companies are investing and increasing their sales in the local market. As many of our economy are based on imported resources these days, remitted money is being diverted back to the international business firms rather than investing and saving for future on Nepalese.
As hot summer season is surged, cold drink’s hot market is on the rocket move.
Here is what the international beverage company’s country manager has to say about opportunity and possibilities inside Nepali market.
Salman Latif Rawn is country manager of Coca-Cola Sabco for Nepal. With peak sales season approaching, A news paper caught up with Rawn to talk about the soft drinks market, Coca-Cola’s expansion plans and business environment in the country after the formation of the new government.
The summer season is back. As a leading player in the soft drinks segment, what are Coca-Cola’s new plans for this season?
Generally, beverage is something which is presumed to be season and off season thing, which, in reality, is not. People do consume even in the winter. But having said that, what we have gone through this year and seen the needs of the people what time they consume and what additional we have to bring in for the consumers to consume our products.
First we’ve launched our 300-ml pack that will make it easy for consumers. This pack has been very highly appreciated by the youngsters in colleges. The other thing what we did is we launched a one-liter pack priced under Rs 100 for household consumers. Apart from that, our 2.25-liter pack will be available round the year, which we used to bring only during special occasions such as Holi earlier.
Will there be any new consumer schemes for this season?
We’ve launched a new campaign that co-relates with the FIFA World Cup because we’re the major sponsor of the event.
Apart from regular promotional schemes, Coca-Cola has also tied up with events, mainly Miss Nepal. What is the rationale behind this association?
Last year was the first time we went with Fanta Miss Nepal. And, we had this association with Miss Nepal Pageant with Fanta. We wanted to groom the talent, bring that talent to the level where international market also knows that this is a Nepali talent.
An example of this is last year’s winner was among the top 10 in Miss Universe. This is providing them an opportunity.
What is the growth rate in the soft drink market?
This is the sixth market that I’ve worked. From a beverage perspective, we’re still at a very early stage. Still we have less than 10 per bottle per person consumption. We are still restricted to limited flavors and packs, whereas, internationally, people talk of hundreds of brands. So I see this market still has a long way to go.
We’ve two plants — one in Kathmandu and the other in Bharatpur. Last year, we put up an investment of more than $25 million for a new PET line at the Bharatpur plant, because we saw there is an opportunity. That is why we’re able to bring this 300-ml and 1-liter packs. These are the ways where we, and the rest of the industry, are expanding. When the industry grows, all players will benefit.
With a new government that is considered pro-market in place, how do you see the investment scenario in the near future?
We had been talking to the last government that foreign investment is always there to boom the economy of any country. What we seek from the current government is stability, on both political and economy fronts.
The lesser the bandhas (strikes), the more business activities happen. What we have been talking in different forums is of having a one-window operation or lesser channels for foreign companies to come and operate. If they have longer approval process, probably they will be discouraged to come here. We take this government as more pro-industry and we have big hopes.
What are the challenges of multinationals in Nepal?
The largest challenge till last year was how many days of the year we’ll be operating. With a new government, we hope bandhas (strikes) will go. Second, the cost of production is very high because of power shortage. It has forced us to use generators. Similarly, too much fluctuation in the price of fuel increased the cost of distribution, which at the end hits consumers. So these are the factors we are concerned about.
Two high profile business events were recently held by the government in partnership with the Federation of Nepalese Chambers of Commerce and Industry. Are these initiatives enough to attract foreign investments?
Probably, the government and the business community are aware about the impediments to growth. It’s time to take steps. If we don’t take the steps, things will not move forward. If things start happening, and if these multinationals know the road-map, they will plan themselves accordingly, which will do better for both the country and the companies.
What are the expansion plans of Bottlers Nepal in the near future?
This market is full of opportunities. We will be surely working to introduce new packs and more flavors. We are also looking to be a part of the juice segment because juice is a bigger segment in this market.
We are also planning how we can enter the water industry because we have been asked many times “when will you bring