From a trading business by importing household products, this conglomerate business today is successful in multiple areas of manufacturing, trading, and service sectors.
--BY NEWBIZ TEAM
In its history of more than four decades, the Lucky Group achieved a major milestone in 2017 when one of its member companies brought a foreign direct investment of Rs 36 billion, becoming the first privately owned company to bring such a huge investment. Shivam Holding Pvt Ltd - a subsidiary of Shivam Cement Limited - brought an investment of Rs 36 billion from Chinese company Hongshi Cements for Hongshi Shivam Cement Pvt Ltd. The joint venture has total cement and clinker production capacity of 6,000 tonnes per day - the highest in the country.
Founded in the early 1980s, the Lucky Group started its business by trading common household products and power tools. Over the years, the group has expanded its presence in the production, manufacturing, and trading of products and services. It deals with products ranging from edible oil to industrial raw materials, spices, tyres, cable and wires, home appliances and electronics, telecom solutions, cement, plastic, and PVC products.
The group has been maintaining a strong presence in the banking and financial sector as well. It is the major promoter of Jyoti Life, NIC Asia, Prabhu Bank, Nepal Life Insurance, Asian Life Insurance Company, Prudential Insurance, and Himalayan Re.
Rajiv More, the Executive Director of the Lucky Group, in an interview with New Business Age, claimed that Shivam Holding Pvt Ltd is the first privately-owned manufacturing company in the country to go public. “Likewise, we are the first company in Nepal to manufacture and supply PVC Compounding,” shared More.
Lucky Group has been a major PVC compound manufacturer and supplier in the country for the past 16-17 years.
Likewise, More also considers being able to launch so many electronic product ranges in just three years of operation as one of the major achievements of the group. “If the current challenges of freight, raw materials, and tensions between Russia and Ukraine hadn’t existed, we would have launched more products by now,” he adds.
Despite the three hurdles in the domestic market - the COVID pandemic, transportation problems, and banks financing, the group has continued to grow. “We are growing in numbers. It’s a big achievement for the entire team,” More states, adding that the group managed to double its sales during the pandemic compared to the normal situation. “All the companies under the Lucky Group got an opportunity to grow in volume during the pandemic time.”
Customer Satisfaction – A Priority
Before importing products into the country, the Group first brings the samples, sits with the distributors, and discusses the quality, design, colour, packaging, price acceptance from the market, and things that needed to be changed, among others. “We sit with the distributors first because they know the customers and their preferences. So, we take inputs from them so that we can give customers what they need and like,” More opines. “We cannot go with what we like or want. We have to see what the market likes.”
According to him, people are happy and satisfied with their products so far. People are repeatedly ordering their products. As the organisation cannot grow if customers are not happy, the Group’s main focus has been on providing quality products at affordable prices.
“Every product has been launched with the thinking that I will use it in my home. So the quality will be of high quality,” he expresses.
More feels that profit is a derivative factor. “Fulfilling the promises and commitments will automatically attract profit,” he said, sharing happiness upon being able to deliver what people want.
Stating that the organisation’s major priority is customer satisfaction, he says that the organisation is not run only by the director or the founder, but by the happy customers. “If customers are not happy, we are not growing, no matter how good the marketing or the sales team is,” he states, “Until and unless they reciprocate, we cannot be a strong team.”
More terms the recent regulation brought by Nepal Rastra Bank (NRB) to stop imports of some luxury products is a major challenge to all trading houses. “A few months ago, the NRB made it mandatory to maintain a 100% cash margin to import most of the goods. This has relayed a negative message to international companies,” he said, adding: “People have started relating this to the situation in Sri Lanka,” he added.
He, however, says that import tightening has some positive sides as well. “I do not mean to encourage it because a lot of people will be affected by this decision. But the market will be healthy,” he added.
Due to unstable policies in the country, More says the group has not been able to plan much. He believes the government should make proper strategies and come up with new rules and regulations instead of bringing such harsh rules.
When More joined the business, he faced a challenge from suppliers. “Some of the suppliers that we had worked with, acted as if they didn’t want to do a long-term business with us,” he said, adding that the product supplied by them was different from the sample sent earlier.
In the initial years of business, More said the Group sent products of its choice in the market rather than what customers liked. “We didn’t think at that time that customers might not like our choice. We realised we were wrong only when we faced challenges in the sales in the beginning,” he said, adding that such challenges made it difficult for the organisation to gain customer trust.
However, he claims to have gained customer trust now by working on those challenges and improving them.
Coping with the problems
The sector that is thriving at present is banks, finance companies, and insurance companies. But it does not mean that other sectors are failing. Every sector gets time to thrive eventually. According to More, it is a matter of mindset, clear vision, idea, and most importantly, patience. “Three years ago, the cement market was thriving. But it is different today. The market is unhealthy,” opines More.
At the moment, there are many manufacturers and all of them are making very thin profits. Although many factories have come up with a lot of production capacity, the market is the same and demand has not grown, said More. Same is the case with oil and steel factories. The demand is limited, but the production is growing, he adds.
“The present condition has created a situation of wait and watch. We will not be aggressive but reciprocate according to the market. Because there is not much demand at present,” he shares.
More added that the Group is going from credit to cash in the present situation. “We have become quite conscious in terms of purchase and started saving some money for future needs. “So, wait and watch is our strategy at present,” he explains.
In addition, he shares that the Group will reduce the quantity but increase the frequency as the monthly sales of the overall market are on a downturn. “Though the situation is serious, it is not that we cannot overcome it. We can overcome this situation but there has to be some stability from the government,” he expresses.
According to More, there is demand in the market but people have started prioritising due to inflation which is leading to de-growth. More, however, sees a huge opportunity in Nepal and says he is very positive about the market improving in the coming days.
Lucky Group gives a high priority to human resources. The group has good manpower to handle different sectors. Currently, more than 2,000 people are working in various positions for the Lucky Group. “We don’t have anything centralised. Every company has a separate human resource team which effectively manages the workforce according to the needs of the particular company,” he shares.
According to More, the conglomerate does not spoon-feed its employees. It allows them to work freely and lets them find things themselves.
Eight members of the More family are managing all the companies of this business conglomerate. They sit together every Saturday, discuss issues in the business and give necessary comments and suggestions.
The Lucky Group considers Corporate Social Responsibility (CRSR) as an important aspect of doing business. As per the norms, they do contribute one percent of their profits to CSR activities in association with different social organisations. Recently, the group installed a 30-bed dialysis centre in Gaushala.
Apart from this, the Group has also been helping poor and orphan children in education. Also, during the Covid-19 pandemic, they helped hospitals by providing medical equipment such as oxygen concentrators.