IMS Group is currently more focused in agriculture

  6 min 29 sec to read
IMS Group is currently more focused in agriculture

How is your agribusiness venture IMS Agro moving ahead?
Currently, we are utilising 25 bighas of land we own in Sunsari for a pilot project and are making a monthly plan. Under this, we will conduct research to identify locations from east to west in Nepal to know about agricultural productivity in different places. We are planning to buy less expensive land and also take land on lease.  

Over two decades ago, Nepal was self-reliant in several crops and farm produce. But, Maoist insurgency, migration of youths and over-reliance on remittance has dramatically increased our food imports.

Nevertheless, the Covid-19 pandemic has changed the dynamics and suddenly agriculture has become a lucrative sector for investment and employment generation as migrant workers are returning in large numbers. We aim to utilise this workforce in modern agriculture. Like in Israel we can utilise modern technology for production.

In the second phase, we will go into export of farm produce. There is a high demand for agricultural products. But it is difficult to keep up with the demand due to the problems in production and supply. The country needs large cold storages for storing agriculture products and we are also working on constructing such facilities. We have started importing agriculture equipment not available in Nepal. Similarly, we are also importing seeds, but we plan to process seeds by ourselves in the future.

IMS Group is currently more focused in agriculture than in other sectors. Tourism, hydropower and agriculture are three major sectors for Nepal to earn foreign currency; we are engaged in all these sectors.

There are some lacking in the hydropower in terms of energy export, whereas we don’t have sufficient infrastructure in tourism. So, agriculture can be the best sector for Nepal to earn foreign currency.

What is your initial investment portfolio for the agriculture project?
The far too insufficient infrastructure has hindered our agriculture development. In this context, we are planning to build cold storages in all seven provinces.

As I mentioned earlier, we plan to buy and take land on lease for construction of storage facilities. IMS Group has allocated seed capital of Rs 1 billion for its agribusiness ventures.  Additionally, we will also borrow Rs 3-4 billion from banks and financial institutions. So, we will be investing around Rs 4-5 billion in our new ventures. We plan to invest in different verticals of agribusiness like winery. However, we won’t be investing in areas such as livestock and animal husbandry.

Where have you acquired land for the projects?
We have already started cultivation and production of lemon, papaya, strawberry, Malaysian Sal on our land in Sunsari. We will be initiating second project in Chanauta, Kapilvastu where we have eight bighas of land. There are also plans to start cultivation of apple in Manang as the district is home to various species of apples; we are in the process to buy land there. Likewise, we are looking for 100-150 bighas of land in eastern Nepal where our team is conducting a study for identifying land suitable for cultivation of various types of crops. We are researching to identify different types of crops that are feasible in Nepal’s topography.  In the second phase, we will focus on export. We are in discussions with importers from Gulf countries including United Arab Emirates and Qatar who have shown willingness to import our products.

How many people are employed in your agriculture project?
Currently, we have around 10 members in our core team working from the office in Kathmandu. In Sunsari, we have around 150-200 people engaged in our project. The number will grow in the coming days with the expansion of our projects.

You are an established business figure from Kathmandu. What attracted you to invest in a sector like agriculture?  
We were planning to venture into agriculture since 2018. However, agriculture has always fascinated me and my plans to get involved in the sector dates back to nearly three decades ago. I bought 25 bighas of land in Sunsari 28 years ago for plantation of Sisao (Indian Rosewood) tree. The trees grew well for 4-5 years, eventually turning into a lush green forest. Unfortunately, a tree disease wasted all our plantation. Then we leased the land to sugarcane farmers. We did that not to earn money, but with a view not to keep the land barren. Basically, it was the country’s growing dependency over food imports that encouraged me to invest in agribusiness. I also saw a potential that a large part of Nepal is located 2,800 feet above the sea level making the country an ideal for producing different types of crops and herbs. Besides, I also observed the factors constraining Nepal’s agriculture sector development like low level of business investment in agriculture, market uncertainties and rampant involvement of middlemen. Thinking of the potential in commercial farming, the benefit it can offer to both farmers and consumers, I talked about venturing into agriculture and finally decided to invest in the sector.

What will be the functions of IMS Agro?
There will be a greater task for the company; it won’t be just like planting paddy and harvesting it. There are many things to be done like production, storage, delivery, packaging and distribution. So, it won’t be easy like production and sales only.  The company will be involved in the entire cycle from importing seeds, equipment, fertilisers to packaging and sales. Currently, the government has been distributing subsidised fertilisers to the farmers; our plan is to import fertilisers if the existing arrangement is changed in the future. We will also be working with farmers to buy, process, package and label their farm produce with our brand and supply the products to the markets.

How do you see the prospect of bank lending in agriculture sector in the coming days?
The current fiscal year’s budget has required banks to extend 20 percent of their total lending to agriculture sector. This and other provisions in the budget show that the government has prioritised agriculture development. So far, IMS Agro has not availed agriculture loan. But we will need bank loans in the coming days. We will maintain a high level of transparency regarding the utilisation of the loan amount.

 Availability of arable land is one the biggest problem in commercial farming. How difficult it has been for you to get the land?
If 1,000 bighas of land is available for us in a one location, we would have executed many of our farming projects from a single place.

But due to the fragmentation, chances of finding a large chunk of land at a single location is rare. After we started promotion of our agribusiness venture, I began to receive calls from many landlords informing about their property in various locations. We are currently developing a database which will have different information including availability of land in different parts of the country. Our teams will visit the locations to identify the suitable spot for the projects.

We have initiated pilot projects in 25 bighas and 8 bighas plots. So, we are looking for additional 100 bighas of land for our next project. Large sized land is also important for us to keep operational expenses in check. Our team is working on a master plan incorporating all these details. We will also talk with all provincial governments to take lands in the provinces on lease.

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