Nepali Times
"Tremendous scope for growth in electricals"

Managing Director of the Nepal Ekarat Engineering Company, Kush Kumar Joshi talked to Nepali Times about transformers, joint ventures and exporting products in the region during this difficult period.

Nepali Times: Why transformers?
Kush Kumar Joshi:
We started business in the electrical line, constructing electrical things like transmission lines, so when we were procuring transformers we found this transformer from Thailand which was of good quality and available at a great price. The electrification ratio at that time was only seven percent, there was a huge demand in the market for transformers so we jumped right in.

Did you really need a joint venture partner? Couldn't you go it alone?
To design and manufacture a transformer is not such a big thing but the quality and experience we gained proved to be a major advantage. Also the chairman of our mother company Ekarat Thailand wanted to do something for Nepal because they were Buddhists. On one hand, there was the business opportunity and on the other, they wanted to help Nepal develop.

How does your domestic market compare with exports?
There is tremendous scope for growth for electrical components in the domestic market because only 19 percent of Nepalis have access to electricity. There is still 81 percent to tap and a huge transformer requirement exists. So far we have made 7,000 transformers. We are very competitive, technically competent and confident about exporting. We can bid in the international market, but we are focusing more on the regional market due to transportation problems. Our focus is Bhutan, Bangladesh and now, India.

How important was your breakthrough in bagging the Bhutan order?
The Bhutan order was very important for us. Their interest was not only the price but also quality and this boosts our reputation. There were restrictions on commercial transactions between Bhutan and Nepal because of the currency but that hurdle was crossed with the help of both governments, which allowed us to deal in Indian currency instead of dollars. It was good for business and the economies of both Nepal and Bhutan. This has opened the door for trade between Bhutan and Nepal. It is a milestone.

How has the political situation affected your business?
We were receiving a lot of inquiries for big numbers of transformers from both India and Bangladesh but we chose Bhutan because it was a small order. We are living in uncertain times with bandas and blockades. Our factory is in Hetauda and for the past three years, the curfew there has prevented us from working after 7PM. We can't operate our factory at full capacity even if we had an order. If we had more orders and weren't able to fulfil them, it would create problems with new customers and our reliability would be questioned. If there was political stability the business would be growing much faster and perhaps we would also have diversified into more sophisticated electrical components.

(11 JAN 2013 - 17 JAN 2013)