Himalayan Brewery Ltd has instigated a dramatic reversal of fortunes over the past seven years, recovering from near dissolution to become one of Nepal’s most innovative and modern-thinking beer producers
Writer: Matthew Staff
Project Manager: Joshua Mann
Since being acquired back in 2010, Himalayan Brewery Ltd has restructured and upgraded its image and facilities in order to reinvigorate a beer producer that has become synonymous with quality and taste in Nepal.
Incepted initially in 1981, the past seven years have presented the Company the perfect opportunity to re-establish itself as a market leader courtesy of fund injections and a more robust management team; culminating in improved quality and a license to produce more than 80,000 hectolitres (hl) of beer per annum.
“The brewery is now closely held by three major investors with business value exceeding £10 million. It is incorporated as a closely held public Company,” further details Himalayan Brewery’s Chairman, Arvind D. Joshi. “As with other professionally managed organisations, the Company has various departmental functions for production, technical and quality controls, engineering and plant management, sales and marketing, finance, audit and funds management, procurement, human resources, and administration. And each department is led by a manager with a team of officers and assistants to ensure efficient and effective management.”
This may sound like an archetypal business structure, but it has been this refreshing adherence to internal stability that has paved the way for its products to flourish in recent years. At present, this range comprises beers in both 650 millilitre (ml) bottles and in kegs; across its Kathmandu Premium Lager, Iceberg Extra Strong Lager, and Commando Super Strong Lager brands.
“We sold approximately 540,000 cases of bottled beer in 2016-17, as well as more than 20,000 litres of draught beer,” Joshi explains, emphasising the footprint that the Company is able to cover across the country. “At present, we sell our beers all over Nepal through our distributors. In order to gain our customer base, our major focus over the past seven years has been to increase our production and sell the produced beers that were possible from the installed capacity of 80,000 hl annually. Without increasing our sales by widening our consumer base, our business objectives would not have been met.”
In recent years, the taste for refined beer has become more prominent in Nepal as more and more citizens travel further afield and experience overseas cultures and styles. And Himalayan Brewery is set to capitalise on this trend, as a small and flexible operator honing in on quality over quantity.
“In the years to come we will strive hard to gain a larger market share in the strong lager segment before looking to venture into the premium beer segments and other styles available worldwide,” Joshi emphasises. Once we are able to do that, we will look into exporting our beers brewed in the Himalayas; all the while sticking to excellent quality so that we continue to be known for the best quality, and best tasting beers.”
The modern day ethos of Himalayan Brewery seems a far cry from the Company’s origins back in 1981 as the result of a technical collaboration with Mohan Meaking India. But in reality, the core values have remained the same; staying true to the initial commitments to corporate social responsibility which saw the business become the only brewer to utilise water from its own natural springs to produce better tasting beers.
“Enjoying smooth operations until 1995, the brewery then went through financial difficulties for the next 15 years when it was leased out and operated by various external parties; operations almost coming to a complete standstill,” Joshi picks up the story. “After the acquisition in 2010, the main strategies that were implemented revolved around the replacement of the old plant and machineries, with new ones embracing the latest technical specifications.
“While production during 2010 was minimal, the current production volume of beer has exceeded 500,000 cases (12x650ml bottles) annually.”
The turnaround has been remarkable not just from a volume and sales perspective, but impressively from an operational excellence point of view with the business essentially evolving its infrastructure from a standing start, to one of the most refined and modern facilities in the country.
A new plant, machines, laboratory equipment and processes have all been introduced to not only salvage the reputation and status of Himalayan Brewery, but to also stand the Company in good stead for expansions to come.
Joshi continues: “Most of the equipment we acquired back in 2010 has now been replaced with modern machines on a phase-by-phase basis. We started by installing a KHS filler/crowner, replacing a filler that was 20 years old, before then changing our steam boilers that were using furnace oil to a Thermax boiler which uses rice husk to generate steam and hot water for our production process.
“This has not only saved our production costs resulting from lower fuel consumption, but has also contributed to reduced environmental pollution. We are constantly upgrading our facilities and other existing machineries by changing the various components, in order to make our operations more effective and more efficient.”
A journey of great-tasting beers
Of course, in order to enact such a drastic overhaul of processes and fortunes, a huge emphasis has been placed not just on the facilities that Himalayan Brewery Ltd has at its disposal, but on the people manning these new, significant premises.
As such, the Company’s HR policy has been of paramount importance, in hiring “the right person for the right job”.
Joshi notes: “Different skills and experiences are required for various functions in the operation of the brewery right from the production of beer to its sales and marketing. We also hire employees from local communities to the extent possible depending on the available set of skills.
“When we first took over the brewery which was barely operating, there were very few economic activities evident at Godawari municipality. Today, after seven years, we can observe a small town marketplace, and many shops catering to our brewery employees and their families. Since we are contributing to their incomes, this creates a cyclic flow back into the local community and its economy.”
The Company’s HR strategy can be attributed to the success of this local enrichment; subsequently fostering employee loyalty and retention in the process.
The same ethos is then also applied to the formulation of business partnerships where possible. Inevitably, imports of raw materials from neighbouring India are required, but localisation is preferred when the resources are available, and long-term relationships are instilled regardless of location.
And in cementing such a stable footing, the business is better equipped than ever before to foresee and negotiate potential challenges to come; thus avoiding a repeat of its now long-forgotten past.
“At present, our business activities are no different from other breweries operating in Nepal but now that we have completed our initial phase following the acquisition, we can now look forward to moving into a more exciting world of beers,” Joshi concludes. “We want to brew various beer styles with varied tastes in the future, taking our consumers through a journey of great-tasting beers.
“Within the next three-five years, we expect to see increased variation across the beers that Himalayan Brewery exports around the globe; produced from locally-grown barley manifested from high altitudes, and nurtured by the fresh and pristine Himalayan waters.”