the new world of paper cups
Tapping into a virgin market has its share of challenges, but work your way around them and the risk becomes rewarding. Pramod Jaisalwal of the Dipesh Paper Cup Udhyog is an example.
There are no signboards that indicate where Dipesh Paper Cup Udhyog is exactly at in Bhotebahal but once you ask around, find the building and walk in you know you’re in the right place for you’ll be greeted by the expected – paper cups. Stacks and stacks of paper cups.
The owner of the paper cup factory, Promod Jaisalwal emerges seconds later to shake your hand and greet you with his humble smile. His office is a miniature paper cup museum with cups of different sizes, designs and quality lined up in shelves. Some you’ll recognize immediately for you’ve held them in your hands while watching movies at cinema halls in town, getting a quick cup of tea or coffee from roadside food stalls or maybe bought a stack to serve drinks at a family picnic.
Although paper cups are more commonplace nowadays, they weren’t always around here in Nepal. In fact, Jaisalwal pioneers as a paper cup manufacturer here in our home market. Earlier, he used to manufacture disposable items made of plastic. For a few years, he continued both the plastic and the paper disposable item business side by side before fully focusing on paper products only. In this regard, when it comes to the disposable utensils and Nepal, Jaisalwal can be considered to be the man. “Back in 2050-2051 BS I introduced plastic cups and containers to major Dairy’s such as DDC and Nepal Dairy Pvt Ltd. Again, after a few years, I introduced paper products to the same market,” he shares.
But getting the market to be in his favor wasn’t easy. “When I started this business, there was zero market for paper cups,” says Jaisalwal who got into manufacturing paper cups six years ago. “I’d bought two machines, my operators were ready and yet not even one single order had come in for around two months. I was very disappointed but I still carried on because I knew this business would do well in the near future,” shares Jaisalwal. His far sightedness is proving to be true.
“Gradually, from a zero market we’ve reached to a state where two machines are no longer enough. Our demand has especially increased with the rise in the mall culture in Kathmandu,” he says. Today, Dipesh Paper Cup Udyog caters to over a 100 different clients. To address the demand, Jaisalwal added four more machines to his factory in Naikap. To do this, Jaisalwal took the support from Mega Bank. Mega Bank has helped Jaisalwal expand his business by providing him loans for raw materials and resources.
“I went to the Bank’s branch at New Road with my proposal and Amit Shrestha, the Manager of the branch responded very positively. The process began immediately. Now, we can manufacture very high-quality paper cups here in Nepal itself,” Jaisalwal says.
The situation is better but it isn’t all easy even today. Although the demand is increasing, this business still struggles with having to deal with a small market whose demands are not yet enough to utilize the optimum capacity of the resources and machinery that Jaisalwal has. This means that he has high operational and wastage costs which if minimized could make expand his profit margin.
“People are still not used to paper cups. Also, paper cups and containers are a bit more expensive than their plastic counterparts. People usually assume it’s the other way round,” informs Jaisalwal. The paper that is used to make the cups is imported. Before the paper can be used to turn into disposable utensils, it has to be food grade. Of course, the eco-friendly nature of paper is another reason why the shift to paper cups makes more sense for consumers.
Adding to high cost of production and insufficient demand is the availability of cheap and low quality paper cups and containers in the Nepali market which are coming in from neighboring countries, which too are brought into the country by evading customs, Jaisalwal points out. “It is a problem but this isn’t a huge threat, because clients who look for quality always come to us,” he says with a smile.
Jaisalwal’s focus right now is to increase his clientele and to also seize the demand from reputed brands who are currently importing their paper disposable items. “The new machines that we bought are of the capacity to produce such high-quality products,” says Jaisalwal adding, “But right now, we haven’t been able to tap into that market and ensure the optimum use of our machines. Right now, the machines we have are operating below their maximum capacity.”
As a business man, the importance of introducing new things to the market is something that Jaisalwal seems to understand. “We’re also looking to produce paper containers which can hold yoghurt,” he informs. When this does happen, it won’t make news but for sure you’ll notice for the product will somehow, sometime or the other be in your hands.