Nirvana Chaudhary, managing director, Chaudhary Group (CG), Nepal’s largest business house that has now expanded globally, discusses with The Smart CEO the company’s global expansion strategy, its India growth plans and specifically, game plans for its FMCG and hospitality verticals
S. PREM KUMAR
The first two things that strike you about 30-year old Nirvana Chaudhary, the eldest son of Nepali billionaire Binod Chaudhary, are his down-to-earth demeanor and passion for growth. Even as we start settling down for this interview in his office in New Delhi, Nirvana starts talking about the Group’s rich history, how his father grew the business and why it is crucial to keep this heritage in mind as he, along with his father and two younger brothers, works towards implementing the Group’s global expansion plan.
Nirvana says, “The Chaudhary Group (CG) operates in over 32 countries around the world and has offices in over 18 countries. We operate over 84 businesses, which we have now consolidated to fit into 10 verticals. Out of these, we’ve identified three fast-growth verticals that we’re going to focus on – FMCG, cement and hospitality,” he says. Over the years, the senior Chaudhary grew the business with two key focus areas. One, the Group continued to expand its presence in Nepal to many different sectors. It owns Nabil Bank, Nepal’s largest bank; an FMCG company that makes potato chips, noodles and several other student snacks; an education arm; a power and EPC company; an electronics distribution firm and recently a telecom company that is slated to roll out services across Nepal. Two, the Group also decided that it’d expand globally – first into South East Asia and eventually, across the world.
Today, while Nirvana is responsible for handling the FMCG vertical, his two brothers Rahul Chaudhary and Varun Chaudhary, take care of hospitality and cement, respectively. Each of them has several CEOs reporting into them; each of them with a specific vertical focus and the goal of growing at a brisk pace in South East Asia, Africa, Nepal, India and some markets in the U.S. as well.
For this article in The Smart CEO, we caught up with Nirvana, Rahul and GP Sah, CEO of the FMCG Vertical in India. We specifically spoke about the FMCG and Hospitality verticals, in addition to the Group’s game plan at the leadership level.
One of the things we’re looking at as a Group is to professionalise further and possibly, setup a leadership development arm modeled along the Tata Administrative Services (TAS).
Nirvana says, “One of the things we’re looking at as a Group is to professionalise further and possibly, setup a leadership development arm modeled along the Tata Administrative Services (TAS).” The Group has also setup international administrative offices in six cities – Sri Lanka, Singapore, Dubai, Mumbai, Delhi and New York. These offices are focused on delivering business development and M & A (mergers and acquisitions) support to each of the group’s businesses.
Competing in the noodle market
In India, one of the key products for CG within the FMCG Vertical is Wai Wai Noodles. The noodle brand was launched in Nepal in the mid 1980s. Nirvana says, “My father observed that there was noodle culture developing in Thailand and Japan and thought it would be a good idea to bring this to Nepal. At the time, we owned Nepal’s biggest biscuit manufacturing facility, so it made sense to expand into another flour-based product.” CG bought over the distribution rights for Wai Wai in Nepal from a Thailand-based company and eventually extended the agreement for global distribution into 30 countries.
In India, the company setup a manufacturing facility in the North East, thanks to its proximity to Nepal, and rolled out the noodle product to markets within the region. Over time, the company expanded and today it sells over one billion packets of noodles. However, Sah, the man responsible for growing the Noodle brand in India quickly adds: “This is just about one per cent of the worldwide market which we believe is 100 billions packets a year.” The mandate given to Sah and Nirvana is to cross Rs.1,000 crore in revenue in the FMCG arm, over the next five years. Nirvana says, “This obviously requires us to setup manufacturing facilities in other parts of India and also expand into other products. We’ve already setup our second manufacturing facility in Southern India and are gearing up to expand pan-India over the next two years.”
Sah agrees that the battle for Noodle market is intense, what with Nestle, HUL and ITC as its competition. Nirvana says, “Eventually it is about how good your product is, how accessible it is and how affordable it is to the consumer.” Sah adds, “Yes, it is going to be a fiercely fought battle, but we believe we have behind us, a wonderful product to rely on.”
The partnership model for hospitality businesses
In the hospitality vertical, CG has pretty much grown through partnerships. The journey began almost two decades ago when Binod Chaudhary inked a 50/50 JV with the Taj Group to form Taj Asia Limited (TAL). TAL went on to own and manage properties in Maldives (Taj Coral Reef and Taj Exotica) and Sri Lanka (Taj Samudra), in addition to various properties in Asia Pacific and South East Asia.
Additionally, TAL also partnered with Conservation Corporation Africa (CC Africa), the world’s largest ecotourism company that specialises in safaris and jungle lodges, to operate wildlife resorts in Panna National Park and Bhandavgarh, among several other places. Rahul, who manages the hospitality vertical, says, “In the hospitality industry, it made sense to partner with brands. In addition to these JVs, we’ve also entered into partnerships with Alila Hotels and Resorts to manage some of our properties. The group also operates a series of hotels under the Zinc Brand, a brand we acquired, and The Farm, at San Benito, a wellness resort in Philippines.”
The journey in the hospitality industry began almost two decades back when Binod Chaudhary inked a 50/50 JV with the Taj Group to form Taj Asia Limited (TAL). TAL went on to own and manage properties in Maldives (Taj Coral Reef and Taj Exotica) and Sri Lanka (Taj Samudra), in addition to various properties in Asia Pacific and South East Asia.
At a broader level, CG’s hospitality business owns and manages properties of various types, luxury levels and sizes. For example, at The Farm, the uniqueness is that it is a resort focused on imparting wellness and health-related benefits to its guests. At the jungle lodges, it’s targeted towards people who have a passion for wildlife.
The modus operandi
The group’s operational style in no different across its other verticals. While the group has expanded globally, it is still focused on building its businesses in Nepal. Nirvana, who is a national squash player for Nepal says, on a parting note: “My role really is a HR role. I need to ensure that I have the right person at the right place, across all my businesses. I also have a President for my vertical, who also serves as my mentor. Of course, it is also critical to manage and drive strategy across the verticals, so I do closely follow the operational reviews and the data that comes up from those.”