
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.