Established in 1998, Nimbus Holdings has come along a journey of 21 years to become one of the major groups in Nepal with a focus on agribusiness. In recent years, Nimbus has ventured into agri-processing and has been producing consumer products including edible oil and different types of food items. According to Ananda Bagaria, Managing Director of Nimbus Holdings, the group has emerged stronger after facing the last one and a half years of the Covid-19 pandemic and this time has helped them to learn many invaluable lessons in business operation and people management. In a conversation with The HRM, Bagaria shared his experiences in dealing with the crisis, plans of Nimbus and his views on the economic scenario of the country. Excerpts:
As a group with a major focus on agribusiness, how were the last 21 months for Nimbus Holdings in terms of business and people management?
Like other businesses, we were also not prepared for the pandemic situation. There were not many options for us to fold up business activities and wait till the situation improves or face the challenge to survive. Accepting the challenge, we kept on with our activities the best we could do in the given circumstances owing to the restrictions placed by the authorities in the movement of people and logistics. However, the government had facilitated people like us in the food industry to keep on operating their businesses. In a meeting with the then State Minister for Industry, Commerce and Supplies Moti Lal Dugar after the government imposed the lockdown in later March 2020, he expressed his commitment to providing every type of support to the food industries and supply of goods to the market. Our people were provided passes by the authorities so that they could go to the factories and offices to work. It boosted our morale and around 60 percent of the workforce came to work.
However, a sense of fear of contracting coronavirus was always there. In that process, we learned a lot to continue our work in an adverse situation. To deal with the emergency situation, we took some decisions such as Covid-19 insurance to our office staff and factory workers; we were the first few companies in the country to purchase the insurance policy for employees. Besides, we also purchased life insurance policies for all our 800 staff. Third, we focused on health safety measures and arranged items such as sanitizers, face masks and also a doctor for our employees. We also arranged oxygen concentrators in case of emergency and have 25 such medical equipment in our inventory. We established isolation facilities in all our offices and factories. Even with these arrangements, we lost one employee to Covid-19, unfortunately.
In terms of international logistics, we did not face many difficulties. There was no short supply of raw materials. But there were difficulties to manage the inventories as we received raw materials faster from abroad than normal times during the lockdowns.
From an HR perspective, the biggest challenge was to boost the morale of our employees during those very uncertain days. I must say that the HR department of Nimbus did a very commendable job in this respect. Thinking that the future is untoward not only for us but for all, we took some important decisions in terms of people management. When the government imposed the lockdown in late March 2020, it was decided that if someone in the company resigns, we will accept it. Then we stopped every type of new recruitment. We also decided not to remove anyone from their job during the time of crisis even if their performance appraisal was bad. However, to lower the cost as the business was hit by the pandemic, we decided to slash the salaries of our staff. The salary of highest-level employees got slashed by 30 percent whereas it was 5 percent for the lower-level staffs in the company. While it was not necessary to reduce the 5 percent salary of our employees in blue-collar jobs, but the decision was taken to make them feel that everybody in the company has to share the burden of the hardship of this difficult time.
This arrangement ended after six months when we realized that Nimbus is in a relatively comfortable position compared to other companies.
Which area of business of Nimbus was hit the hardest and which were the lesser hit?
During the peak of the Covid-19 crisis, our food business grew a little. Animal feed business also was in the same level. The food business grew probably because we were organized and more prepared than others in terms of managing inventories, depots and other aspects of the business. Most importantly, people in Nimbus companies worked with a very high level of motivation. The team Nimbus performed exceedingly well during those uncertain days. Meanwhile, our plastics and chemical business became zero and we went into producing facemasks and hand sanitizers for a short period of time. For us, it was more of satisfaction than business as we sold such products at the lowest price points in the market and also donated to different groups in large quantities. It became a binding factor in our teams as people working in our companies worked with high motivation during the time of crisis. People also saw Nimbus as a brand that was contributing to society.
Has Nimbus restarted the hiring process? How do you see hiring in the overall private sector?
We are hiring right now. We have people in the mid-level but getting people in the higher level with 10-15 years of experience in a particular field is proving difficult. It is because many of those aged over 50 years are now back-seated and are hesitant to join the workforce. Similarly, many experienced people have gone abroad. I have felt that the skilled workforce in our country has further drained after the start of the Covid-19 pandemic.
What are the major lessons learned from the pandemic for Nimbus?
For the business group and for me personally, the biggest reiteration was where the team Nimbus is to be. We stood for each other in challenging times. For instance, when we started the online grocery store, Nimbus Bazar, in late March 2020, we could not hire anyone as delivery personnel as the government had already announced the lockdown to curb the spread of coronavirus. So, the salespeople within our company went on to deliver the orders to the customers with their own motorbikes. The realization that everybody cares about the company was really a great feeling.
What big changes have you seen in doing business in Nepal in the last two years of the pandemic? What factors do investors today consider more today while investing than a couple of years ago?
The major change is on emphasis to invest in technology to carry out daily activities and being efficiency in work. It also means businesses have realized to lessen the burden caused by unnecessary traveling times and meetings as many of such tasks can now be carried out remotely. In Nimbus, we started organizing online meetings called Weekly Huddle where I connect with 40 key people of the company every Monday. If there are interdepartmental issues, people can discuss them on this platform. This has not only made things easier but has also increased the level of accountability in the organization.
The pandemic has also taught businesses to identify high performers within their organizations. We also identified such employees in our group who were not seen forward previously. It is because our focus was on organizational micro-management for the past one and a half years. In this process, we came to know about them which is amazing.
There are some noticeable changes also in terms of business investment. Pre-pandemic, the focus of businesses in a country like Nepal used to be mostly on getting benefits from globalization. Post-pandemic, people have been talking and even started practicing the idea of ‘global approach, local presence’. This means, we welcome the use of global technologies but also focus on presence in the local market. The disruptions caused by the pandemic have shown that barricades in international trade could be erected during emergencies. People have also started to think if smaller industrial setups are good options compared to establishing large facilities. In the last 2 years, we have bought 3 smaller animal feed mills instead of building huge plants.
The most important lesson we have learned so far is to value human emotions and caring other people. This has taught us to have smaller and scattered units and be prepared for an emergency situation.
What new areas for investment Nimbus is focusing on at present?
Some of our investment projects planned before the pandemic like the construction of warehousing facilities haven’t been completed due to the disturbances. Nevertheless, we are keen to expand investments in the agri-processing business. We are looking to buy food industries and invest in infrastructure like food parks. Currently, our investments have slowed not because of the pandemic but due to the ongoing liquidity crunch in the banking system. Banks have asked us to wait till the situation improves. I think this is the right time for us to expand our presence in the agri-processing business as other people are hesitant to invest. Investing in such infrastructure and would offer us the first mover advantage after normalcy resumes. Unfortunately, the looming third wave of the Covid-19 pandemic, liquidity crunch and tightening of foreign currency exchange for imports have been deterring us in this respect. We are, however, not stopping and will move ahead with our plans whenever the environment becomes conducive.
Several online agribusiness marketplaces have come up in recent times targeting urban consumers. What needs to be done to develop agribusiness e-commerce in Nepal? What obstacles need to be removed?
Talking about e-commerce, it is an iceberg to deal with. There are many things above and beneath the surface from inventory management, logistics to delivery of orders. There is a misconception that the cost in e-commerce is less compared to doing physical business. While operating our own e-commerce platform, we realized that the cost of logistics is very high. If e-commerce in Nepal has to turn into a different shape to become profitable, the only way I see is, it becoming shared economic platforms where online marketplaces, food delivery services and ride-sharing platforms come into one place. Some people have been trying to establish such platforms and we have also started to work in this respect. In the next few months, Nimbus Bazar will come into a new avatar.
The latest data published by the Department of Industry has shown a sharp increase in registration of micro, small and medium enterprises (MSMEs) in the last fiscal year. Does it point to the growth of entrepreneurship in the country? How do you view this?
I see this preparation of globalization vs localization. It was seen in the past 18 months that local markets are important than foreign markets in times of emergencies. For example, it is not the online grocery platforms but local grocery stores that people went to buy daily essential items during lockdowns in 2020 and 2021. The truth is we undermined the importance of local entrepreneurship which is here to stay despite the rise of e-commerce. This is the case not only in Nepal but in the whole South Asia region. Local entrepreneurship is not just a commercial network but an emotional network. Local grocery stores have helped to sustain many people who lost their jobs or got salary axed during the peak of the Covid-19 crisis which is something we need to respect. Whether it is local farmers or grocery store owners, we have many entrepreneurs around us. And I think the growth of digitization and e-commerce will help to create more local entrepreneurs than ever.
In the current context of sluggish economic recovery, liquidity crunch and the political scenario surrounding the upcoming elections, how do you see the country’s economy moving forward?
After the country was declared a republic in 2008, political leaders use to say that the economic agenda will be prioritized after the new constitution is promulgated. Regardless of all the commitments of political leaders, the agenda related to the economic transformation of the country is still to take a definitive shape.
Coupled with political instability, the country’s financial problems and sluggish economic recovery, more people might leave Nepal to work and leave in other countries. In this situation, investments may dry up and corruption might become more rampant. If the financial situation deteriorates, the government might be forced to borrow more money from international institutions to run the country. But this time the water has gone through our heads. Among other problems, the decline in remittance is the most dreadful factor for Nepal’s economy. It means the country’s gross domestic product (GDP) will shrink much faster than before. Unless some sincere corrective measures are taken urgently by the government with a long-term perspective, the economic derailment cannot be stopped. We have faced this situation also in past without many problems. In this situation, what the government needs to do is to work on strengthening domestic production. But a question remains whether our political leadership has the will to take decisive actions to fix the economy.
