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  He did not accept my conditions. I felt his proposal was a ploy on his part to make my brand name subordinate to his. We could not agree on the terms. Mama forwarded another proposal through an investment bank we both dealt with. This was different from the first proposal. They wanted a joint venture in those countries where neither Wai Wai nor Mama had been introduced. They thought I should be grateful for the worldwide collaboration. But again, it would have entailed the surrendering of my brand. I rejected the offer again. In today’s world, the worth of a company does not lie in its fixed assets alone. In fact, they contribute only a small part to it. A company’s real worth lies in its intellectual property. That is why I have always stood firm when it comes to the brand name. Here in Nepal, we are driven by a mindset of producing goods under others’ brand names, making huge profits while also paying royalty. But I chose the path of establishing my own brand. I think this strategy is the main factor that has driven the Chaudhary Group to where it is today.

  Following the strategy we drew up to globalize Wai Wai, we have expanded our presence and now sell in more than thirty-five countries.

  Establishing an ambitious goal for oneself can feel daunting, but one must rise to the challenge. That was how I felt when I signed the contract with Thai Food. They were, however, extremely supportive. They put me in touch with companies that manufactured plants for production of instant noodles. I bought a plant of the smallest capacity from a Taiwanese company. I installed the first plant at Saibu, Bhainsepati, in Lalitpur district. The plant could produce 30,000 packets of instant noodles in an eight-hour period. That plant is still operating in Bhainsepati. However, we have many more plants today.

  In those days, there were no channels for the systematic distribution of fast-moving consumer goods (FMCGs) such as noodles and biscuits. Once the goods were produced, they were handed over to the wholesalers. I hired the late K.R. Sharma, a senior official at Nestlé India, to manage the market for Wai Wai. He worked with us for around nine years and played a pivotal role in strengthening the market, not just for Wai Wai, but for the entire Chaudhary Group.

  Wai Wai hit the Nepal market in 1984. Now we needed a strong marketing campaign, and I give credit for the success of that campaign to Sharma. As part of his strategy, we produced a very popular advertisement for television featuring the model Dolly Gurung. Dolly became an overnight celebrity as a result of that ad, which was shot by Basudev’s cinematographer Prem Upadhyay. Wai Wai was hugely successful.

  Within two years, Wai Wai had brought about a sea change in the eating habit of Nepalis. It became so popular that it virtually displaced Nestlé’s Maggi from the Nepal market, making Nepal self-sufficient when it came to instant noodles. We set up our second plant at the CG Industrial Park in Nawalparasi as the demand for Wai Wai rose meteorically. We bought yet another plant that was being sold by an Indonesian instant noodles company. Today we produce approximately 1.5 million packets of Wai Wai in Nepal alone, fifty times the quantity of 30,000 packets that Kitty Pong Sri had doubted we could sell.

  War of instant noodles

  After the success of Wai Wai, instant noodles companies mushroomed in Nepal. They were all trying to copy us. Some of the competitors were my friends. However, they were so desperate to get a share of the market that they almost destroyed the market itself. At one point, all the other instant noodles companies formed a coalition against Wai Wai. They were not working to expand the market but to take a share of Wai Wai’s by slashing prices to such an extent that they were making losses. Television channels were deluged with advertisements for instant noodles, all offering amazing prizes—from goats to cars to houses to overseas trips—to their customers.

  The impact of the competition was so intense that even a well-established company like ours was jolted. Wai Wai’s share of the market plummeted from 80 per cent to 40 per cent. The price difference between Wai Wai and other brands became negligible. After our competitors started to offer unbelievable discounts, the wholesalers refused to pay the minimum price we had agreed on. Minimum price is the strongest indicator of a product’s place in the market. If the minimum price of your product does not vary despite your competitors’ decision to slash their prices, then you know your product is firmly entrenched in the market.

  Conversely, a company knows it is in trouble when the price of its products in the market falls dramatically. I passed through that phase in 2004. G.P. Shah, vice president of the Chaudhary Group, played a big role in steering Wai Wai through that crisis. During the time of the price war, he had just taken charge of the sales and marketing division of the company. It was Nirvana’s decision to shift him from production to marketing, which proved to be a good move.

  One day, GP, as we called him, came to me with some market news. A woman had reportedly told a retailer, ‘We’ve had enough of Wai Wai. If we buy Mayos, we might get a diamond necklace.’

  ‘Consumers’ aspirations have changed,’ GP said. ‘Other companies are coming up with schemes that offer prizes, and Wai Wai consumers are feeling neglected. If we don’t start giving our consumers what they want, then we’ll face a tough time in the market.’

  ‘What should we do?’ I asked.

  ‘We should offer prizes as well.’

  ‘So should we copy them?’

  ‘Do we have a choice?’ G.P. replied. ‘Mayos is offering diamond necklaces, so we should offer an entire set of diamond jewellery. Our slogan should be: “No more just a diamond necklace: now a full set of diamond jewellery.”’

  His idea worked. We gave sets of diamond jewellery to more than a dozen customers within a month. We came up with prizes such as houses, cars, motorcycles, laptops, desktops and many other attractive items. We were, however, not satisfied with the long-term prospects of boosting sales by offering prizes. We devised four strategies to survive the price war.

  First, we decided to focus on wooing young people and making our product more suitable for children. We launched a new product called Wai Wai Quick with the flavour of chicken curry. We also started to add more nutrients such as calcium, minerals and vitamins. This brought something new to our brand.

  The second strategy related to media. We started to produce informative advertisements and launched creative programmes. The Gyan Uday (Rise of Knowledge) scholarship was one of them.

  Third, we pulled Wai Wai out from the cut-throat price war and launched many cheaper brands such as Gol Mol, Mama and Rin Tin, which we called ‘fighter brands’. We offered many deals with those brands, such as ‘buy one and get one free’ and ‘three packets for only Rs 20’. We launched a counter-attack against our competitors through these brands, but we never brought our premium brand Wai Wai to the battlefront.

  Fourth, we changed our organizational structure. Nirvana played a pivotal role in this. In the initial days, our organization relied heavily on foreign executives and technicians. This had helped build it, but did not work in the longer term as the market started to mature. Local managers produce the best results because they not only understand the mindset of our local competitors, but can also develop marketing strategies in keeping with the broader values of Nepali society. I have an old photograph in my office at CG Industrial Park of the people in my organization. Only a few Nepali employees can be seen in it. That photograph shows how much my organization has grown, as most of our employees today are Nepali.

  The four-pronged approach we devised to deal with the competition was successful. Wai Wai not only regained its initial position as the leading brand, but emerged even stronger in the market. Wai Wai and the other brands of instant noodles and snacks we produce bring an annual turnover of Rs 250 crore.

  It is not that we were not successful before Wai Wai, but that brand took us to new heights, both financially and in terms of our organizational structure. An idea born at the baggage belt of Tribhuwan International Airport created the largest FMCG company in Nepal.

  And the story of Wai Wai does not end here . . .

  C
G Industrial Park (Previously, Gangadevi Chaudhary Udyog Gram)

  In 2004, there was an attempt by Maoist combatants to blow up an army vehicle at Dumkauli in Nawalparasi district. They had set off the explosion by drawing electricity from a switch at a waste processing centre inside Chaudhary Udyog Gram, which is now known as CG Industrial Park.

  There had been a strange silence the day of the explosion. The only traffic along the Mahendra Highway consisted of ambulances and vehicles belonging to the security forces. A Nepal bandh (a general strike across the country) was not in place, but there appeared to be a local bandh in the area surrounding our plant. An army vehicle could be seen in the distance, its metal glinting in the sun. It was speeding madly, swaying from side to side. It came closer and closer. The sunlight reflecting from it strained our eyes.

  Boom!

  Flames erupted on the highway, which had been baking in the parching heat throughout the day.

  Suddenly, the sky was filled with the cries of startled birds. The children who had been playing in the area began to cry. The grown-ups seemed used to it. They rushed inside their houses and latched the doors and windows. The strange and heavy silence morphed into raw fear.

  Luckily, the detonation had happened five or six metres ahead of the army vehicle. The soldiers got off the vehicle, lay down on the road and opened fire on both sides of the highway. The cries of the birds grew louder. Frightened civilians tried to get a peek at what was happening through the cracks in their doors and windows. Everyone was gripped by panic. Having missed their target, the Maoist combatants had already fled. Now the soldiers focused on the Industrial Park. They stormed in and began harassing and beating up our employees. They searched every room in the facility to see if the combatants were hiding there. Some of our employees were even taken away. I had to call up a Major in the army to secure their release.

  The incident took place at about 4.30 p.m. on one of the darkest days of the dark year of 2004. We knew the Maoist insurgents had forced their way into the Industrial Park to draw the electricity they needed for their ambush. But had we tipped off the army, there would certainly have been reprisals against us by the Maoists. Having not informed the army, we became their victims. We were caught between a rock and a hard place from the time the armed conflict began. Later, on 18 February 2005, the general manager of the Industrial Park was abducted by the Maoists. He was held captive for seventeen days at a time when the country was gearing up for the second People’s Movement, which was also backed by the Maoists.

  It was not easy to run a business at a time when the entire nation was frequently brought to a grinding halt by the armed conflict and the general strikes called by various political groups. So many times, we would hear gunfire outside the complex while we were working inside. Our staff would rush into the office, sometimes climbing in through the windows, and lock the doors behind them. Sometimes, they would sleep at the guest house on the site because going home was too dangerous. We lived in constant fear of bombings and intimidation by either the Maoists or the armed forces. There were times when our factories could not operate as we were not able to bring in the raw materials. Processed goods would remain not dispatched for days, gathering dust. To add to this, the trade unions affiliated with either the Maoists or other political parties would put forward endless, unrealistic demands. Under those circumstances, many entrepreneurs closed down their factories.

  We still managed to run the Industrial Park complex, despite the fact that Nawalparasi was seen as a Maoist-controlled area in those days of insecurity, chaos and instability. The Industrial Park, which began operating in 1996, the same year the Maoists launched their People’s War, actually managed to expand during the years of the conflict. However, except for the bandhs and a few incidents such as the one mentioned above, there was no strike in our plant through those turbulent days. Regardless of the tensions outside, there was no incident of vandalism or arson inside our complex. My colleagues, staff and the residents of Dumkauli made a big contribution to ensuring peace in the complex, and I am eternally grateful to them.

  The creation of Special Economic Zones (SEZs) gained momentum after the rise of the Asian Tigers such as Singapore, Hong Kong and South Korea in the 1970s and 1980s. These SEZs offered all kinds of services to investors. In Nepal, every budget since the restoration of multiparty democracy in 1990 has promised Export Processing Centres and SEZs but nothing has materialized so far.

  I had envisaged a similar industrial complex for ourselves with all the necessary infrastructure, such as drinking water, sewage, electricity and access roads, something which could accommodate our growth for five to six decades. In creating Gangadevi Chaudhary Udyog, I made that vision a reality.

  The idea came to me in 1993. I was on a cross-country tour in connection with the FNCCI election. I realized that the swathe of land between Narayanghat and Butwal in western Nepal would be suitable for an industrial estate. The broad Mahendra Highway passes through that belt; it was less than two hours’ drive from the Indian border; it was four hours away from Kathmandu and only three hours away from other big cities such as Pokhara and Birgunj.

  I launched a massive search for an appropriate plot of land in the area. A former lawmaker, G.C. Mahendra, proposed Dumkauli as a suitable site. Another former member of Parliament, Hridayesh Tripathi, suggested a site at Bardaghat. I was not able to secure a deal for the Bardaghat site, so I decided to go with Mahendra’s proposal. In the first phase, we acquired eighty acres of land. Then we added another fifty acres with the help of local residents. As a result, the Industrial Park complex consists of 130 acres currently. It is larger than the largest state-run industrial district at Balaju on the outskirts of Kathmandu. I selected urban planner Ajay Chaudhary—now a professor at the Delhi School of Architecture and Design—to prepare the master plan for the complex. At that time, he was living in the United States. Everything in the Industrial Park has been carried out according to his design.

  The foundation stone of the Industrial Park was laid in 1993. There were only a few scattered houses in the area. I was based at Narayanghat until the first phase of construction was over. I stayed at Chitwan Hotel in Bharatpur Heights, a facility run by Dilip Mainali, a friend from my Saraswoti Campus days. I stayed at the hotel for almost six months. Lily converted the upper floor into a bedroom and office. I would leave for Dumkauli after breakfast, Lily usually accompanying me. There was a hut just opposite the Industrial Park where we would have our afternoon meal—beaten rice, roasted soya bean, pan-fried potatoes, eggs and pickles.

  I also became commercially involved in the Chitwan hotel. One day, Dilip told me, ‘I can’t run the hotel properly. The Nepal Industrial Development Corporation has already sent a warning letter. You have to rescue me.’

  He was thinking about a partnership.

  I had always wanted to be in the hospitality industry. What was more, Dilip was a close friend too. The hotel was pathetically rundown. It had to be reconstructed. I called up Kishor Pandey, the general manager of Hotel De L’ Annapurna, an old friend of mine whom I knew through Kiran. We had been planning some major hotel projects in Kathmandu together; however, for various reasons those projects were not launched. We had, nevertheless, opened Bhanchha Ghar restaurant in Kathmandu together, in partnership with a few other friends. He later set up a hotel management company called Keyman. I was a partner in that as well.

  Kishor and I invested in Chitwan Hotel, with Dilip remaining the local partner. We are building our CG Mall at the location of the hotel.

  This was my first investment in the hospitality sector. Today, I am on a drive to open hotels and resorts across the Asia-Pacific region, setting up a multinational company for the purpose. What embarked me on that journey is a different story.

  I had been inspired to construct the Industrial Park complex because of the inconvenience of operating geographically scattered factories. Once the infrastructure for the complex was ready, I realized my investment would be w
orth it only if I operated at least half a dozen factories on the site. I decided to seek partnerships with foreign investors, letting them utilize my infrastructure. We held discussions with Colgate-Palmolive in India, but we could not agree on the conditions for partnership. They opened their plant in Hetauda. We also held negotiations with Rajdoot Paints of India. Those negotiations too broke down, so we decided to launch our own brewery and cigarette factory. Unfortunately, they did not do well initially, only increasing the pressure on us to find a way to use the Industrial Park effectively. We decided on a second Wai Wai plant at the Industrial Park, followed by a third—the plant we bought from Indonesia—as what was being produced by the Bhainsepati plant was not enough to meet the demand. These two plants supported the Industrial Park in the early days.

  We added two more plants after Wai Wai ‘went viral’, as one would say these days. We started to produce dozens of ‘fighter brands’ of instant noodles as well. We also started production of cheeseballs, chocolate wafers, Rio fruit juice, television and other electronic products. Gradually, the beverages (Nepal Ice, Haywards 5000, Real Gold) and the cigarettes (Josh, Pine, Pride) also gained momentum. Today, a dozen factories operate inside the Industrial Park complex, producing goods ranging from snacks that sell for Re 1 to television sets that sell for Rs 25,000. Around 1600 people are employed there. More than forty executives live inside the premises. Around a hundred trucks ferry goods in and out every day. Serpentine lines of hundreds of cyclists can be seen during shift changes in the morning, afternoon and evening, one group of employees heading home as the next arrives. More than 85 per cent of the employees are local residents. There are 350 women on the staff. We have formed a local, all-party committee, both for sourcing employees and for carrying out social work in the community.