“It's not easy to bring investment in Nepal ”
Visiting Business People
Spotlight, July 2006
“It's not easy to bring investment in Nepal ”
Francois Vitez , Project Manager, Gestion Conseil SCP Inc. of Canada was in Nepal recently. SCP has 25 per cent shares in the Khudi Hydropower Company which is developing the 4-MW Khudi power project in Lamjung. Excerpts from an interview:
How has been the experience of SCP in Nepal as an investor?
It's not easy to bring investment in Nepal . From a Western perspective, there are two major issues. First is the devaluation of Nepali Rupee which is hitting us. It is inevitable, but it can be compensated in some creative manners so that everybody has a win-win situation and the Nepali people would not have to pay too much for the electricity they use.
The second point is the country's stability. Though I stayed for a long time in Nepal , I realise that the more I know about Nepal , the more I don't know about it. I know enough to be comfortable in many situations as an investor. But I also know that things look totally different for an outsider. And it will take a lot for somebody to attract investment here. It will take a lot to promote a positive investment image about Nepal .
Does that mean that you are not interested for further investment here?
Definitely we are interested. First, we want to finish this project well. We want to build a team and that's how we can get successful projects. Now we have done a good part of building team and we want to continue. But we haven't started any specific new project yet.
What is your suggestion to Nepali policymakers about how to go about in developing hydroelectricity potential?
I can make a comparison with Canada ’s Quebec of 1950 and the present day Nepal . Back then, we were looking a bit like a developing country and then a "quite revolution" took place and the engine of that revolution was hydro electricity. The Quebec government started to license some big projects in the north and they had the guts to go to New York and get the money. The big projects thus built became the largest power stations in the world. Now these projects are generating a huge income. We are just like Nepal because we have lots of hydro resources and we also have a neighbour which demands a lot of electricity. Many people had thought it was crazy to do so. I think this happens here in Nepal too. It will require the same level of guts to jump to projects, build alliance with India in order that the next generation, years from now, can look back and say "Oh My God, those guys had the guts" and eventually thank this generation.
What problems are there to develop the projects which have been identified?
There is no project financing for hydro in Nepal. This is a key problem. This means that to be able to develop a project that needs $10 million, you have to have all the $10 million in cash or property to offer as collateral. But think for yourself: why would you need to borrow when you yourself have the money? That's the kind of chicken-egg situation we are in now. In Canada and most other countries, the project is its own guarantee. It's risky but as the banks will become more familiar with the hydro sector and have their own due diligence process that would bring their confidence up, many people would be able to do project financing. We are already taking lots of risk coming to Nepal. To take a risk beyond what we are not taking in our own country would be quite illogical for us or any other foreign investor.
"UPS will be in Nepal for long-term"
Andrew Conelly, Senior Vice-President, South Asia Pacific of United Parcel Service Singapore Pte Ltd. (UPS), was in Nepal in late July for the official opening of UPS' partnership with Shangri-La Tours as the agent in Nepal. On the sidelines of the function, he talked to New Business Age about the plans of UPS for Nepal market. Excerpts of the interview:
Previously you had a different agent. But you changed it recently. Why?
The reason of course is the business diversification of Shangril-La Tours and their ambitions have better suited our ambitions in Nepal .
You also had a court case with your previous agent. What happened with that?
That's correct .We exercised the option not to extend the contract we had with the previous agent. He wanted to contest that decision.
Is that case over now?
I understand the hearing is due sometime in August.
How is the trend of courier business internationally and in Nepal ?
At the moment you suffered from some political instability and that has affected the general economy. As you understand, the courier business doesn't produce anything, it only carries goods manufactured by other people. If the general economy is down the courier business would also be down .But now as stability seems to be coming into economy, so we have better expectations for Nepal business.
Any targets or plan set for Nepal market?
Our partners Shangril-La have plans to expand our presence in the Nepali market . I'm sure that we will be marketing successfully over the coming months and years. Ours is an organisation which is 99-years-old. We have the longevity connected to the name of our organisation so we expect to be in Nepal for many years to come.
We are adding to our portfolio of products and world wide expansion on a continue basis. And the fact that we have gone into partnership here with Shangri-la as goes to demonstrate that purpose and commitment.
Can you tell some figures in terms of your company's market share?
No, we really don't discuss specific market share. I can tell you about our organisation. We are the world's largest package delivery company. Our revenue last year was US$ 43 billion. We employ 407,000 people and are now operating 270 airplanes.
What makes UPS different to its competitors like DHL, TNT, FedEx?
We are unparalleled. Next year we will see the centennial of UPS. We have a global presence which is unrivalled. We have sweeter products and technology that are unrivalled. So we are very large organisation. That is built only on one thing. That is customer care, customer commitment. And the return on that is that it will continue to grow.
What is the situation in terms of the price?
We always want to be competitive.
"Hospital is a word-of-mouth business"
Dennis M Brown, Group Chief Operating Officer of Bumrungrad International that operates the Bumrungrad Hospital at Bangkok that attracts about 1 million clients per year, including about 400,000 from around 190 countries, was in Nepal recently for the inauguration of the representative office of the hospital in Kathmandu in partnership with Temple Tiger Group, one of Nepal's leading tourism business house. On the sidelines of the inauguration, he shared information about his hospital's plan for Nepal. Excerpts:
What is behind the decision to open this agency in Nepal ?
It is based on the fact that the number of persons coming to us from Nepal has been steadily increasing and last year it reached 2000. This office is established to provide additional logistics and administrative support for the individuals seeking care in Bangkok so that we will be able to coordinate visas, appointment schedule, travel arrangements and anything to make it easier for the patients to get to our hospital.
What are your expectations from Nepal market?
We desire to provide a better service to the individuals who arrive in our hospital. Hospital is a very much a word-of-mouth business. We do some general advertising for just name recognition. But people select their doctor and hospital based on the reputation of the doctor and hospital among their friends and relatives. The best way for a hospital to grow its business is to provide superior service. This regional office is an additional step in trying to add to the service level from us.
How many people visit Thailand in a year as health tourists?
Our hospital treats about one million patients a year out of which about 400,000 are of international origin. Last year, we had 76,000 from the Middle East and we expect to see 100,000 this year. We see about 50,000 from US and 30,000 from Australia .
How big is the health tourism in Thailand ?
We believe that roughly about 50 percent of international patients go to Thailand . Overall, Thailand receives a million patients a year. Roughly about half of that comes to Bumrungrad and the rest is distributed to among other high level hospitals in Bangkok .
What is the recent trend in hospital business?
We still see nearly 25 percent growth in our international business every year. Patients around the world are either waiting too long for social health care system or, if they have to pay out of pocket, they seek the most affordable and best care that they can purchase. You will find that countries that are competitive in world currency terms, have a very well skilled and hospitable healthcare work force and are easy to travel to attract health tourists. Thailand scores high on all these counts compared to other Asian countries. We have a very skilled medical capability in Thailand . Medical education has been the focus of the Thailand for number of years. The Thai people are very service oriented. Lastly, the currency crisis of 1997 and devaluation of Baht made Thailand very affordable to international tourists. Now we are trying to see that we are competitively structured not only from the currency issue but also in terms of the cost of providing the care.
Is there any possibility of providing clinical facility or even opening a subsidiary of your hospital in Nepal ?
There are possibilities in expanding our services in different countries. We have established an international subsidiary in Manila and we have build a hospital in Dubai . We are actively looking at a number of other countries as well. There are lots of things that need to occur for us to make the final decision. Such a referral office as in Nepal is the first step towards that direction and we need to see how things go. But it is very early to say anything at this point.
As of now, we want to make sure that people understand we are here to help support the patients and doctors here in Nepal . We also want to make sure with the referral office that the medical information or information about any related activity that occurs elsewhere gets to the doctor here in Nepal so that the continuity of care occurs in the patients’ treatment process. The ability to provide information support to the medical community here is in the best interest of the patients.
Spotlight, July 2006
“It's not easy to bring investment in Nepal ”
Francois Vitez , Project Manager, Gestion Conseil SCP Inc. of Canada was in Nepal recently. SCP has 25 per cent shares in the Khudi Hydropower Company which is developing the 4-MW Khudi power project in Lamjung. Excerpts from an interview:
How has been the experience of SCP in Nepal as an investor?
It's not easy to bring investment in Nepal . From a Western perspective, there are two major issues. First is the devaluation of Nepali Rupee which is hitting us. It is inevitable, but it can be compensated in some creative manners so that everybody has a win-win situation and the Nepali people would not have to pay too much for the electricity they use.
The second point is the country's stability. Though I stayed for a long time in Nepal , I realise that the more I know about Nepal , the more I don't know about it. I know enough to be comfortable in many situations as an investor. But I also know that things look totally different for an outsider. And it will take a lot for somebody to attract investment here. It will take a lot to promote a positive investment image about Nepal .
Does that mean that you are not interested for further investment here?
Definitely we are interested. First, we want to finish this project well. We want to build a team and that's how we can get successful projects. Now we have done a good part of building team and we want to continue. But we haven't started any specific new project yet.
What is your suggestion to Nepali policymakers about how to go about in developing hydroelectricity potential?
I can make a comparison with Canada ’s Quebec of 1950 and the present day Nepal . Back then, we were looking a bit like a developing country and then a "quite revolution" took place and the engine of that revolution was hydro electricity. The Quebec government started to license some big projects in the north and they had the guts to go to New York and get the money. The big projects thus built became the largest power stations in the world. Now these projects are generating a huge income. We are just like Nepal because we have lots of hydro resources and we also have a neighbour which demands a lot of electricity. Many people had thought it was crazy to do so. I think this happens here in Nepal too. It will require the same level of guts to jump to projects, build alliance with India in order that the next generation, years from now, can look back and say "Oh My God, those guys had the guts" and eventually thank this generation.
What problems are there to develop the projects which have been identified?
There is no project financing for hydro in Nepal. This is a key problem. This means that to be able to develop a project that needs $10 million, you have to have all the $10 million in cash or property to offer as collateral. But think for yourself: why would you need to borrow when you yourself have the money? That's the kind of chicken-egg situation we are in now. In Canada and most other countries, the project is its own guarantee. It's risky but as the banks will become more familiar with the hydro sector and have their own due diligence process that would bring their confidence up, many people would be able to do project financing. We are already taking lots of risk coming to Nepal. To take a risk beyond what we are not taking in our own country would be quite illogical for us or any other foreign investor.
"UPS will be in Nepal for long-term"
Andrew Conelly, Senior Vice-President, South Asia Pacific of United Parcel Service Singapore Pte Ltd. (UPS), was in Nepal in late July for the official opening of UPS' partnership with Shangri-La Tours as the agent in Nepal. On the sidelines of the function, he talked to New Business Age about the plans of UPS for Nepal market. Excerpts of the interview:
Previously you had a different agent. But you changed it recently. Why?
The reason of course is the business diversification of Shangril-La Tours and their ambitions have better suited our ambitions in Nepal .
You also had a court case with your previous agent. What happened with that?
That's correct .We exercised the option not to extend the contract we had with the previous agent. He wanted to contest that decision.
Is that case over now?
I understand the hearing is due sometime in August.
How is the trend of courier business internationally and in Nepal ?
At the moment you suffered from some political instability and that has affected the general economy. As you understand, the courier business doesn't produce anything, it only carries goods manufactured by other people. If the general economy is down the courier business would also be down .But now as stability seems to be coming into economy, so we have better expectations for Nepal business.
Any targets or plan set for Nepal market?
Our partners Shangril-La have plans to expand our presence in the Nepali market . I'm sure that we will be marketing successfully over the coming months and years. Ours is an organisation which is 99-years-old. We have the longevity connected to the name of our organisation so we expect to be in Nepal for many years to come.
We are adding to our portfolio of products and world wide expansion on a continue basis. And the fact that we have gone into partnership here with Shangri-la as goes to demonstrate that purpose and commitment.
Can you tell some figures in terms of your company's market share?
No, we really don't discuss specific market share. I can tell you about our organisation. We are the world's largest package delivery company. Our revenue last year was US$ 43 billion. We employ 407,000 people and are now operating 270 airplanes.
What makes UPS different to its competitors like DHL, TNT, FedEx?
We are unparalleled. Next year we will see the centennial of UPS. We have a global presence which is unrivalled. We have sweeter products and technology that are unrivalled. So we are very large organisation. That is built only on one thing. That is customer care, customer commitment. And the return on that is that it will continue to grow.
What is the situation in terms of the price?
We always want to be competitive.
"Hospital is a word-of-mouth business"
Dennis M Brown, Group Chief Operating Officer of Bumrungrad International that operates the Bumrungrad Hospital at Bangkok that attracts about 1 million clients per year, including about 400,000 from around 190 countries, was in Nepal recently for the inauguration of the representative office of the hospital in Kathmandu in partnership with Temple Tiger Group, one of Nepal's leading tourism business house. On the sidelines of the inauguration, he shared information about his hospital's plan for Nepal. Excerpts:
What is behind the decision to open this agency in Nepal ?
It is based on the fact that the number of persons coming to us from Nepal has been steadily increasing and last year it reached 2000. This office is established to provide additional logistics and administrative support for the individuals seeking care in Bangkok so that we will be able to coordinate visas, appointment schedule, travel arrangements and anything to make it easier for the patients to get to our hospital.
What are your expectations from Nepal market?
We desire to provide a better service to the individuals who arrive in our hospital. Hospital is a very much a word-of-mouth business. We do some general advertising for just name recognition. But people select their doctor and hospital based on the reputation of the doctor and hospital among their friends and relatives. The best way for a hospital to grow its business is to provide superior service. This regional office is an additional step in trying to add to the service level from us.
How many people visit Thailand in a year as health tourists?
Our hospital treats about one million patients a year out of which about 400,000 are of international origin. Last year, we had 76,000 from the Middle East and we expect to see 100,000 this year. We see about 50,000 from US and 30,000 from Australia .
How big is the health tourism in Thailand ?
We believe that roughly about 50 percent of international patients go to Thailand . Overall, Thailand receives a million patients a year. Roughly about half of that comes to Bumrungrad and the rest is distributed to among other high level hospitals in Bangkok .
What is the recent trend in hospital business?
We still see nearly 25 percent growth in our international business every year. Patients around the world are either waiting too long for social health care system or, if they have to pay out of pocket, they seek the most affordable and best care that they can purchase. You will find that countries that are competitive in world currency terms, have a very well skilled and hospitable healthcare work force and are easy to travel to attract health tourists. Thailand scores high on all these counts compared to other Asian countries. We have a very skilled medical capability in Thailand . Medical education has been the focus of the Thailand for number of years. The Thai people are very service oriented. Lastly, the currency crisis of 1997 and devaluation of Baht made Thailand very affordable to international tourists. Now we are trying to see that we are competitively structured not only from the currency issue but also in terms of the cost of providing the care.
Is there any possibility of providing clinical facility or even opening a subsidiary of your hospital in Nepal ?
There are possibilities in expanding our services in different countries. We have established an international subsidiary in Manila and we have build a hospital in Dubai . We are actively looking at a number of other countries as well. There are lots of things that need to occur for us to make the final decision. Such a referral office as in Nepal is the first step towards that direction and we need to see how things go. But it is very early to say anything at this point.
As of now, we want to make sure that people understand we are here to help support the patients and doctors here in Nepal . We also want to make sure with the referral office that the medical information or information about any related activity that occurs elsewhere gets to the doctor here in Nepal so that the continuity of care occurs in the patients’ treatment process. The ability to provide information support to the medical community here is in the best interest of the patients.