Milkmandu: A Canadian national’s dream to transform the dairy industry of Nepal

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At a time when most Nepalese were willing to leave for abroad, Matt Dawes, a Canadian national decided to come to Nepal, start a business, and spend the rest of his life here.

Bored of his life and realty business, Dawes came to Nepal leaving his luxurious life back in Vancouver, Canada, with 70 lakh Nepali rupees with him.

A frequent traveler, and having already been to Nepal twice, Dawes had found the life in Nepal more interesting. So, he moved to Kathmandu with his wife, and brother’s family, and, started a small guest-house in Patan.

For running a restaurant in the guesthouse, they needed quality dairy supplies. “As we couldn’t find any around providing organic and quality dairy supplies, we bought a cow and gave to a farmer so as to use the milk in the restaurant,” shares Dawes about the chapter that marked the beginning of his career in the dairy business of Nepal. “But, as we couldn’t consume all the milk produced, we started selling it. And, the demand increased in such a way that we bought a second cow, and third cow, and so on,” he added. Ultimately, they got so busy in cow milk business that they closed the guest house down and started to look after the dairy business full-time.

They had done a market research before jumping into the full-time dairy business though. And, Dawes had talked to lots of expats in Kathmandu, and got confirmation from 200 of them who wished to buy the milk produced from the business on a daily basis. A type of selling that doesn’t typically happen to a business, making it more secure in the beginning itself. These 200 customers are regulars till today.

In the starting days, he himself used to do processing milk at 5 in the morning, finish it at 6, chill it down, and carry out all the deliveries on his own, every day.

Scaling up the business

In the beginning, they were only working on milk, as they did not have any idea on producing other varieties of dairy products. But, as the demand increased, they had to explore the other product ranges, and grow the business.

“Scaling up is a vey painful growth phase. During that time, you’re not big enough to do what you aspire, but have too much of demand. So, we went to grow the farm, and trained all the farmers,” he shared.

Started with a single cow, that too for their own consumption, they currently produce almost 1000 liters of milk and other dairy products in any single day. And, started-off with selling bottled milk, they have now introduced a variety of yoghurts, creams, butter, cheese, and other dairy products under Milkmandu.

Their products are now sold through Big Mart, and Saleways. And, they too have a range of corporate clients who consume Milkmandu products on a daily basis. Added to this, their products are available at Foodmandu, and delivered straight to home.

Formula of making a quality business

“There is a concept in Nepal that more expensive machines are better. It’s not true. It instead doesn’t matter how expensive and sophisticated your factory is. If you input bad products into it, it’s not going to magically make good products. What Nepali model is, everybody wants to own a factory, but nobody wants to own a cow,” he explains where we are lacking. “The factory operators almost have no idea where the milk for the factory is coming from. So, having overall sight of all the aspects of business is necessary to have a quality product,” he adds.

The roller coaster journey

“For a foreigner, starting a business in Nepal costs a lot of money. And, it too takes a lot of time to kick-off a business. All your money has to be registered in Nepal Rastra Bank, and the immigration has to give you a business visa. It’s not easy as we speak. The actual process of starting a business takes at least 4-5 months,” he shares his experiences of starting the business.

In the last three years of period, a lot of things happened in Nepal. Earthquake jolted Nepal, and we had to go experience a trade blockade. He too got into a really bad motorbike accident, and had to spend two months in Hospital.

So, he takes the journey so far as a roller coaster one.

Outsourcing, and maintaining quality control

Milkmandu doesn’t operate animal husbandry on their own, instead, buys cows and gives it to the farmers. It outsources all its supplies but closely monitors the production of supplies so as to maintain the quality control.

“Till now we have helped farmers we trust, trained them, and bought them cows, and quality controlled the milk produced. But, I want the farmers to do well. They too need to make money. I can see that most businessmen in Nepal want to make every single penny possible from the suppliers. I don’t want to do the business that way. I know that if a farmer is making money, and his family is happy, he is going to treat the cows well. In the case of delivery guys too, I try to pay them more than anyone others. Thus, it’s easy to find people to work for me, make them feel motivated, and stay longer in my business,” he shares.

Customer satisfaction

Customer satisfaction and quality control is the key to having regular customers for a business, and make them buy your products on a daily basis, he shares from his experience.

Dairy market of Nepal

The dairy market in Nepal is immature and uneducated, Dawes finds, because neither the government nor the consumer know or care about the quality of milk sold in the market, and even don’t demand a better product. “Every consumer in Nepal boils milk before consuming, but boiling kills nutrients contained in the milk,” he says.

While starting Milkmandu, Dawes wanted to create something new in the dairy market, and started selling milk in bottles, a new concept that time. He wanted to provide milk that is rich in nutrient, and healthy. “Milk in the west contains vitamin, protein and every other nutrient necessary for a child-growth, but that’s lacking in Nepal. If you boil the milk, there is no benefit of having it. It’ll just be a flavored water,” he shares, adding “With Milkmandu, I am trying to introduce healthy, and safer milk in Nepali market.”

Collaborating with pre-existing businesses

About one year ago, Milkmandu collaborated with Sanjeevani Dairy as a consultant. And, the collaboration grew to such an extent that all the dairy items of Milkmandu are now produced in the factory of Sanjeevani Dairy itself, benefitting both the companies.

The future

They have plans to go out of the Kathmandu valley soon. But, as they don’t add chemicals or any other preservatives to the milk products, it has to be consumed within a few days. So, if they could get refrigerated transportation, they are aiming to expand the business to other towns in Nepal also.

In the duration of 5 years, Dawes wants to advocate for the government to raise the quality of dairy products in Nepal, and avail labs to quality control, and standardization. He too wants to start a chilling center.

“Along with scaling up of my business, I want to see the rest of the dairy market improve. I want to see my competitors be better,” he shares.

To the emerging entrepreneurs:

He suggests the aspiring entrepreneurs to not to copy other’s work. “Find something that is not being done in your area. There are so many industries where you can work on,” he says.

“Additionally, you have to be exceptionally professional. Try to provide quality in your products and service. And, be good at your customer service. If you apply these things and start something new, success is not that difficult,” he shares to the future entrepreneurs.

Startups for a better Nepal!

By: Basanta Kumar Dhakal

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