When Nepal Ekarat Engineering Company (NEEK) was established as the first Nepal-Thailand joint venture company in 1990, only seven percent of Nepalis had access to electricity. For many that would have been a hurdle but NEEK saw it as an opportunity.
Kush Kumar Joshi and Ajaya Mudbhary were electrical engineers and they immediately realised that with democracy and liberal economic policy, there would be new investments in hydropower. As Nepal electrified, the demand for transformers would zoom.
And so it did. NEEK laid emphasis on quality and competitiveness through productivity. Soon the plant in Hetauda couldn't produce transformers fast enough for the domestic market and today meets 90 percent of the domestic demand.
When Joshi was doing contract work on transmission lines, he used to import transformers from Thailand. Through research and market study he found transformers from Thailand to be affordable and of high quality and began importing from the Ekarat Company in Thailand. Ekarat's chairman Kiet Phong Noichaboon was not just a businessman, he was altruistic and a devout Buddhist. He wanted to do something for the land of the Buddha's birth and that was how NEEK was set up.
Most other exporters wouldn't want to give away their business to a local subsidiary but Ekarat proposed to Joshi that they set up a manufacturing base in Nepal. "Not only did he want to expand his business he also wanted to earn divine merit," explains Joshi, "and I think he has earned it."
Commercial production in Hetauda began in 1992 and the initial period revolved around training and support. NEEK's transformers meet international standards and Joshi says he wanted to dispel the notion that things can be third rate just because you are supplying to the Nepali market.
But like any other manufacturer, NEEK is facing problems due to the blockades of highways and strikes. Joshi would also like to see the government being more proactive in encouraging industries like NEEK so the country can become self-sufficient. Industrial analysts say the fact is that NEEK has been successful because of a management which injected vision into the business.
Now, NEEK is venturing into exports and recently got an order for several hundred transformers for Bhutan. There was another pending order for 15,000 units from Bangladesh but NEEK had to turn it down because of transportation uncertainties. "We didn't want to take the order and not be able to deliver," explains Joshi.
NEEK has the capacity to produce 2,000 transformers a year but it could be more if there were no night curfews and blockades. Their main client is Nepal Electricity Authority to which it has sold 6,500 transformers. But the demand is rising and after it received its ISO 9001 certification in 1999, NEEK is bidding for supplying to India, Bangladesh and African countries.