Shahil Agarwal
Joint Managing Director
Shanker Group of Industries & Trading House

By Sushila Budhathoki

Everytime, when veteran Actor Rajesh Hamal attracts viewers with his convincing voice in a TV commercial of Jagdamba Steels, they have a picture of a giant, down to earth steel company built from some big money. But it was only the dedication and optimism of the investor that turned once the flop steel industry into a successful business empire. All in all, the Sanker Group (SG), owner of the steel company that now owns 30 other operating companies in its different industrial sectors, had to wait for around 40 years to experience the achievement. 

The credit of the success that the group has achieved so far all goes to Shanker Lal Golyan according to Shahil Agrawal, Joint Managing Director of Shanker Group of Industries & Trading House. Shahil, also the son of Golyan, says, “My father was very hard working. He worked continuously for the development of the company all his life.” Shankar Lal Golyan continued and extended the business after his father Rawat Mal Golyan, originally from Myanmar, started business with a button industry during 1960 in Nepal. And after 19 years, in 1979, he formed Shanker Group. 

Investment in the steel company was the group’s fourth attempt in doing a business since the previous investment in trading, manufacturing and again in trading bore no fruit. The SG started manufacturing buttons during 1960 after their trading business saw no good sign. And again, the button industry did not perform well and they returned to trading business again. According to Shahil, they were forced to find an option and entered into manufacturing industry again when the second attempt in trading business got full stop for around two years. “Like many industrialists we also faced many ups and downs in our business. But we never give up. This has been our main strength since the inception,” he shares. 

Leading the Construction Market
The largest companies in the group, Jagdamba Steels and Jagdamba Cement are strengthening group’s brand strengths in Nepali steel and cement market with a market share of 55% and 35% respectively. Apart from steel and cement, the group’s specialization is also in plastics, textiles, FMCG, automobile and electronics. Jagdamba Steels is one of the biggest private companies in Nepal in terms of turnover (225 million dollars) followed by packaging industry (50 million dollars), cement industry (100 million dollars), textile industry (45 million dollars)and FMCG industry (30 million dollars) among others. These manufacturing companies are located at Simara, Jitpur, Lumbini, Bhairahawa and Parwanipur. 

The total revenue of SG was approximately 500 million dollars in 2011/12. Companies in SG also export few of the products to India and other neighbouring countries. According to Shahil, most of the companies in Nepal are the main target customers of the group and it is currently in the process of extending its spread in markets which are new and also expand in the ones where it already exists. Shahil says, “We are performing according to the market dynamics. Now both trading and manufacturing are important and we have invested 50 per cent in trading and 50 per cent in manufacturing.”

Management strategies
The company regards itself among those system and process driven companies. Targeting from top to bottom and from bottom to top level is one of the management strategies of SG. According to Shahil, the management hires people who are better than anyone of them in that particular field.

The group believes development of present manpower while giving them bigger challenges. It has been also conducting various training programmes within the groups and outside, especially in the automobile and electronics sectors to strengthen human resource capacity. Around 10,000 employees are currently working in the group, out of which the steel industry employs over 4,500.

Challenges
Like many business giants in Nepal, the group also sees too many challenges, yet too many opportunities. According to Shahil, because Nepal is in the development stage, the country has various limitations attached to a particular industry, as most of the businesses are dependent on the neighbouring countries. He says, “We also face a lot of local problems relating to electricity, labour, strikes among others. However we are trying to exploit the water resources, tourism which will eventually also help develop various industries and increase exports from Nepal.”

On the other hand, the continuous competition in the market has taught the group to overcome the challenges. Shahil says, “We focus in highest level of technologies and the best manpower to produce our products and we market them well. We also believe in continuous development at all levels, especially when it comes to innovations.”

Extension Plans
The group is planning to enter into a new cement/clinker production project in near future. If this plan is implemented, it would be one of the largest inter-grated cement plants in Nepal, close to Kathmandu. There are also plans to increase the cement production up to 3 Million Tons by the year 2015.

Likewise, it is also planning to increase capacity of its steel production to 1.2 Million tons by the year 2015. In packaging sector there are plans to expand the capacity of non woven fabrics and also the expansion of the capacities of AD*Star Bag’s with sophisticated European technology. The capacity of the textile industry will also reach 30,000 Metric Tons by the year 2015. Currently, the annual capacity of the cement industry is 0.8 Million Tons. Likewise, the annual Capacity of steel production, packaging industry and textile industry is 1.1 Million Tons, 36,000 Tons and 15,000 tons respectively.

It aims to become a leading company for Instant Noodles in Nepal. There are also plans for producing energy drinks and expanding the FMCG business by introducing different snack items such as wafers, cheese balls, etc in near future.

Setting up a greenfield project for Instant Noodles in Assam, India is also in its expansion plans. Similarly, in electronics, it is planning to establish an SKD line to manufacture LCD and LED television in Nepal. And in automobile, it is planning to expand the automobile business into commercial and passenger vehicle categories.

CSR Activities
According to Shahil, the group is concentrated in CSR activities mainly through steel and cement companies. It is focused on helping the neighboring villages by supporting them in local development activities, such as building schools, hospitals, water, bridges, sanitation among others. The group has also worked with N-SET for the awareness campaign of earthquake safety and preparation and has produced and played various TV and press commercials. The group has also trained some local masons on using steel while making buildings in various parts of the country.

Memorable History
The steel business that has been the symbol of SG did not progress overnight. There were already 30 companies with similar products, out of which 20 closed down due to the losses after the group joined in the line. However the group did not crave for other business options and determined to stick to the steel business. Shahil says, “The first six years were very hard to survive but we did not give up. We had a positive attitude and we were confident that the business would take a good turn.”

And as expected, the industrial sector started reviving after 2000 and according to Shahil, it was the major turning point for the group. The development of housing companies, cities and infrastructures ultimately grew the number of clients of the steel company. This eventually inspired the group to invest in various other companies mainly in the industries producing construction materials. In 1996, the group established Jagdamba Wires and also established Jagdamba Enterprises, Jagdamba Synthetics, Jagdamba Roto Packaging, Jagdamba Cement, Subha Shree Jagdamba Cement among various others one after another.