NPAC Pvt Ltd Hopes to Change Nepals Kiwi Fruit Industry

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NPAC Pvt Ltd Hopes to Change Nepals Kiwi Fruit Industry
Nepal Packaging and Cool Storage (NPAC) Pvt Ltd seeks to be a big player in the kiwifruit sector. But to do so, they must first eliminate the inefficiencies of the sector in Nepal.

Kiwifruits are small, egg-sized exotic fruits packed with unique flavours and plenty of health benefits. They're known for their commercial value, and countries like New Zealand, Chile, Italy, Greece and France are the fruits' biggest exporters. Nepal's terrain, which largely consists of hilly areas situated at elevations between 800 and 2,900 metres, has been deemed favourable for the cultivation of the fruit. Kiwifruit farming was introduced to Nepal a decade ago. And many farmers in the hilly areas have since been attracted to kiwifruit cultivation, with hundreds of hectares of arable land dedicated to the cause. But the real commercial value of kiwifruits has not yet been extracted in Nepal, owing to lack of scientific cultivation methods and efficient management principles. 

Nepal Packaging and Cool Storage (NPAC) Pvt Ltd, one of the six companies being accelerated at NEXT Launchpad, is seeking to be a big player in the kiwifruit sector. To do that, they'll first have to eliminate the inefficiencies of the sector in Nepal by using the knowledge and expertise the members of the company have gained after working for six years with Zespry International Limited--a New Zealand company known for being the world's largest kiwifruit marketer.

Sagun Upreti, founder of NPAC Solutions, began exploring Nepal's kiwifruit cultivation sector a few months after he returned to Nepal from New Zealand in 2014. He could sense the problem with the cultivation practices right away--for example, the distance between each plant wasn't right, and the soil used for cultivation wasn't of the right composition either, among other problems. He visited other kiwifruit farms in several districts and found similar problems in the cultivation methods. 


In September 2015, he registered NPAC Solutions with the objective of changing the way kiwifruits are cultivated, enhancing the quality of the produce to meet international-quality standards, and developing local as well as global markets for the high-value fruit.

 

Improving cultivation practices 

After the kiwifruit was introduced in Nepal, thousands of farmers became interested in kiwifruit cultivation because they learned about its potential as a commercial fruit. But the way the fruit is cultivated here, according to Upreti, is not entirely scientific. Many farmers end up getting smaller yields than they had expected largely owing to flaws in their farming practices. 

"Cultivating kiwifruit is like doing mathematics; to get optimum output, you have to calculate the placement of each plant based on its gender," says Upreti. Furthermore, there is a problem with the kiwifruit saplings available in the Nepali market. NPAC has thus been making farmers aware of the different species of fruits, the right grafting process and better harvesting methods. Additionally, Upreti is also training farmers on methods for yielding better quality fruits and is working on plans to provide them with the technical support required for them to make use of more scientific cultivation practices. NPAC also provides farmers with quality kiwifruit saplings and helps them implement the proper plantation methods. The company has already been working with farmers in 14 districts, out of the 18 in Nepal known for kiwifruit cultivation. Upreti plans to reach out to other farmers in the remaining districts soon.

 

Enhancing quality 

In September 2016, NPAC tried sourcing kiwifruit from farmers all over the country--to export the fruit to India. When NPAC examined the fruits they had sourced, they found out that there were several problems with their quality--they were not of uniform size or of the same species and were too ripe--meaning, a large portion of the fruits were unfit for export. Moreover, most of the kiwifruits produced in Nepal weren't (and still aren't) of the type that's in demand globally. "A species of kiwifruit called Hayward has the highest demand in the global market. But barely 10 per cent of Nepali farmers are producing this variety of kiwifruit," says Upreti. 

"Furthermore, if we want to export kiwifruit to the global market, the produce must meet very high standards of quality. But producers donít take into account quality standards in our country," says Upreti. "Setting up quality standards is a must if we are to have a thriving kiwifruit industry." To get the ball rolling, NPAC is trying to collaborate with the government and development agencies to help farmers grow fruit that meet international quality standards so that Nepal-produced kiwifruits can better compete globally. 

 

In search of markets

If Nepali farmers continue to grow kiwifruits at their current rates, in three to five years, the supply will be more than the local demand--which means the country should look into exporting its produce. But to tap into the global market--which looks exceedingly promising--Nepal needs to collaborate with market leaders of kiwifruit around the world. And NPAC's vision is to do just that: using the founder's close ties with companies like Zespry, the company should be able to find markets outside Nepal. 

 

Organising the industry

But to get to that scale, the company must first lay down the groundwork. The kiwifruit industry isn't too well-organised, for starters. The lack of regulation has allowed farmers to engage in price-cutting practices, which has resulted in lowered profits for many farmers. For example, during harvest season, farmers often sell the fruit at Rs 50 a kg, as opposed to its actual value of Rs 300. They resort to lowering the price of the fruit for fear of getting no returns at all, for selling at lower prices means farmers can get at least some return, instead of letting their yield rot and go to waste. NPAC plans to discourage such practices and organise the industry by buying the kiwifruits for the right value directly from the farmers, helping them produce more kiwifruits and selling them in the market at the right prices. Furthermore, Upreti has been lobbying the government to form an association of kiwifruit growers that will seek to bring together different stakeholders of the kiwifruit industry.

 

Storage issues

In Nepal, kiwifruits are available in abundance right after September, but the fruits get scarce after May. Many kiwifruit lovers are thus forced to buy imported fruits at higher rates. NPAC believe they can help in this regard too. To preserve for longer periods the kiwifruits that the company sources from farmers, NPAC seeks to build a Controlled Atmosphere (CA) cold storage facility. And they are looking for investments that will go into building this facility. 

The goals that NPAC has set for itself are extremely ambitious: they aim to use their expertise to organise the industry so that farmers here produce better yields of higher quality fruits and employ better management practices. They are essentially seeking to implement changes from the ground up so that Nepal-grown kiwifruits are as much in demand as fruits grown in leading kiwifruit-growing countries.

 

First published in M&S VMAG.

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Guest Tuesday, 16 January 2018