The economy may be a shambles, industry may be struggling, but Nepal Lever Limited weathered the turbulence of the past year by achieving 25 percent growth, taking its domestic turnover to Rs 882 million. But not all is well there, exports have shrunk by more than half. The annual turnover of NLL reached Rs 1.24 billion, netting the firm after tax profit of Rs 43 million. NLL is the market leader in toothpaste (60 percent) and controls 50 percent market share in toilet soaps, 80 percent in detergents and 45 percent in fairness creams. Its shampoos, introduced two years ago, now claim 30 percent of the market.

In the meantime, NLL exports tumbled by over 50 percent, down to Rs 355 million from Rs 837 million the previous year. Exports were hit mainly by fiscal measures in both Nepal and India, which the company says are unlikely to change over time, and will probably cause sales in India to shrink further.

The company says that Indian Countervailing Duty based on Manufacturer's Retail Price (MRP), which became effective in February 2001, and Nepali taxes on exports have cut into its margins and made certain products totally uncompetitive. NLL has already stopped exporting toothpaste, and the sale of Liril soaps in India-at one stage almost every unit sold there was made in Nepal-has also shrunk. "There may be no point retaining investments made for export," says Gurdeep Singh, co-chairman of NLL.

The domestic business environment has also been far from perfect. Besides increased costs of transportation and the difficulties of doing business in the hinterlands, NLL has still been unable to recover Rs 120 million (now down from Rs 420 million) that the government owes it as "duty drawback."

NLL is also seeing a change of leadership. Rakesh Mohan (third from right above) replaces Sandip Ghose (standing, above) as the new managing director.