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Feeding the masses


GITA DHUNGANA IN BIRGUNJ


MIN RATNA BAJRACHARYA
FEED ALENTY: The Nimbus factory at Birgunj now produces 50,000 tonnes a year.
Dressed in a plain shirt and jeans, Anand Bagaria quietly listens to a group of journalists who are grilling farm brokers in Birgunj about the profits they make in their role as middlemen between farmers and consumers. The next day, he joins the same group of journalists on a field visit to poultry farms and a hatchery in Chitwan. Again, he listens attentively to the conversation between journalists and the farmers.

Bagaria, director of Nimbus, which runs a livestock pellet feed factory in Birgunj, is using the opportunity to hear about new developments and trends in the agricultural and livestock business directly from the mouths of traders and local farmers.

"We keep abreast of technical and commercial developments worldwide, and invest a large portion of our earnings in technical updates every year," says Bagaria, who plans to expand his feed-producing unit into a fully integrated animal health and livestock company, listed and traded in the local stock exchange, in the next five years.

Nimbus, which came into existence more than a decade ago as a distributor for Nepal-made consumer products, ventured into the animal nutrition business in 2000 and began exporting poultry feed supplements to India. "We kept our eyes open on the domestic market as well, selling feed ingredients, supplements, medicines and vaccines. In 2003, we set up the first ever pellet feed mill in Nepal," says Bagaria.

The factory, with a fixed investment of Rs 150 million, now produces 50,000 tonnes of livestock feed annually and provides direct employment to 250 people.

The company's move into the livestock business was not exactly planned, but happened more by accident, recalls Bagaria. Years ago, he bought five tonnes of poultry feed supplement from a European firm, after being convinced by a dealer that the product had a good market in India.

But he didn't expect that the market would be good enough to allow his family-run business to grow into one of the leading agro-companies in Nepal, with an annual turnover of Rs 1 billion.

As he travelled around livestock farms looking for customers for the feed he had bought, he got a deeper understanding of the domestic livestock market and the opportunities it afforded. Bagaria decided to become a permanent supplier, and four years ago the firm began producing, distributing and selling poultry and livestock pellet feed under the brand name Shakti.

But the development was not always a smooth ride. "In the first year, it was really challenging to market our product," says Jagadish Prasad Agarwal, Bagaria's father. For the first few months they were only able to sell 300 tonnes of feed a month, while they were producing 4,500.

"The unorganised approach of participants in this industry-too much credit, poor quality, barter, syndication and cartelling, and a lack of technical know-how and focus on the cost of production-was our biggest problem," says Bagaria, who takes care of marketing and distribution, while his father looks after the factory in Birgunj.

"To overcome this we identified a few conscious and receptive farmers across the country, and took it on ourselves to improve their cost of production and management skills. Then we got a multiplier effects and these successful farmers became our brands ambassadors."

The livestock industry, same as any other agricultural business in the country, lacks modernisation and proper management. A restructuring of the industry would help bring more employment opportunities for rural communities around Birgunj and in other parts of Nepal.

But in an industry which is so large and unwieldy (roughly Rs 15 billion turnover yearly), it will take a lot of energy and vision all round to achieve this. "We really need a professional approach, both technical and commercial," says Bagaria. "The biggest challenge for farmers is still finding a market and decent prices for their produce. We should try and develop some kind of structured and transparent system in conjunction with farmers and market buyers."

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LATEST ISSUE
638
(11 JAN 2013 - 17 JAN 2013)


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