We have heard too often that Nepal is a land of opportunities. But it is not just limited for Nepalis. Anyone willing to take the opportunities and plough the seeds can do so, even if it means the person comes from beyond borders. Matt Dawes, 30, is a Canadian who took that opportunity in Nepal and has spent the past three years running his dairy business Milkmandu in response to the market need of quality dairy products.

Idea from necessity

Matt realized a business opportunity when he came to Nepal. He first visited Nepal back in 2004 to trek through the Annapurna range and Everest Base Camp, and returned back to Nepal in 2013 with his wife, Nicole. However, he returned the second time with a mission to open a guest house in Patan with his brother, Noah. The business, Hira Guest House, also had a small café attached to it.

That business gave rise to another business idea of Milkmandu. Matt expresses, “We didn’t like the packet style milk quality available in the market. The gentleman who we bought the place from was just processing his own milk. So we started using the milk for our consumption and for the café. Word spread around soon and people wanted to buy the milk, especially foreigners and expats. We had about 30 customers within a few months. We did not have a factory then so we sold the milk in recycled wine bottles.”

Catering to the market need

Overwhelmed by the market response, Matt checked for the availability of milk in stores around the valley only to realize, what he terms as, “a blatantly obvious hole in the market”. “People wanted good quality dairy but had no ways of getting it in a reliable way,” shares Matt.

They started the company Milkmandu Dairy Private Limited officially on 1st February, 2013 with an investment of around Rs.10 lakhs. In search for organic and quality production, they have switched from their first farm in Budhanilkantha to Gokarna to Kusunti to finally in Bhaktapur, where they currently operate. Their farm has now grown from three to 54 cows.

Named by Noah as it came about in a joke, Milkmandu has become popular among quality dairy seekers and serves a niche market for the product. The dairy products are available at Saleways Departmental Store in Pulchowk and Maharajgunj, and KK Mart in Bhaisepati. They also deliver to customers’ doorsteps by themselves and also through Foodmandu. With most of its marketing done through word of mouth, embassy newsletters and social media, the company has 714 registered customers till date. A part of the profit made by Milkmandu also goes to fund for Mercy Mission Children’s, Kusunti.

Quality sells

According to Matt, the focus has always been on quality. From the cows’ food and vaccinations to the delivery of milk to customers, he makes sure of the quality control.

Having come from a real estate background, Matt had little knowledge about dairy. He hired foreign experts to help him set up the business.

“I learned a lot of things from YouTube and got help from people in discussion forums on the internet as well. There has been a lot of thorough research behind the business,” says Matt.

But Matt has had a tough time finding the right workers. “Maintaining quality is everybody’s responsibility and it happens at every single level. If one link of the chain is out, whole product is compromised. To ensure quality, we need staffs who are meticulous and detail oriented. It has been difficult to find that here and to get things done in time,” explains Matt.

At present, Milkmandu has a total of 40 local staffs in Bhaktapur. When asked why that many staff in a small facility, he replies, “Because everybody needs to be double checking and triple checking operations.” Matt’s formula is to have one supervisor for every three workers and one manager for every three supervisors. Apart from ground staff, his team also includes consultants from Canada, Australia and the UK.

Creating the household name

While quality is key for Matt, he also places strong focus on customer service and professionalism. He has taken phone calls himself and made personal contacts with customers. Calling for feedback on a weekly basis has helped improve the product and customer service as well. “I know the names of my customers’ kids and their dogs,” he exclaims.

“To me, if you have a startup, you have to go far, above and beyond in whatever the chosen market is. There are a lot of challenges such as getting the product in the right temperature through crazy traffic on a motorcycle or a scooter, which never happens in the western world. It’s going to be seven days a week work,” says Matt.

Facing legal issues

As foreigners, Matt and his brother have struggled with legal processes. They had to pass hurdles to register the company in Nepal. So they brought in a non-residential Nepali to ease up the process. Tax payment adds up to the governmental issues too. “There is no clear set of rules and regulations to get it done in an easy way. So getting used to it is a challenge,” says Matt. They have also not been able to certify their organic product due to absence of accredited organic certification body in Nepal.  

Copycats have also been a problem.

“People have copied our logo and the look of our products. They say they work with me or something like that to get into the market,” says Matt.

Some of these copycats have even threatened Matt’s life, after which he had to call the police on them. He says there isn't a proper regulation to address these types of problems. Learning from these experiences, Matt encourages his customers to use products from authorized sources only.

When asked about working through these challenges, he wittily replies: “I won’t say I love milk, but I love innovation. This is something I couldn’t do anywhere else in the world. This is a life I really enjoy and something I wouldn’t give up on.”

Emerging growth

Milkmandu has recently merged with Sanjeevani Dairy, Bhaktapur to set up a new factory. They have created a new HACCP (Hazard Analysis and Critical Control Points) before moving to that facility and are currently closed down for a month before re-starting operation. This merger will equip them to produce 12,000 litres of milk per day and become more price competitive (under Rs.100 per litre) to enter a larger wholesale market.

Apart from making its products available at more stores in the city, the company is also looking to start a homogenized product line and get into producing flavoured milk, ice cream, different flavours of yogurt, frozen yogurt, different flavours of cream.

Opportunities plenty

Nepal has sharpened Matt as an entrepreneur. According to him, he has become an innovative version of himself here and encourages others to grab the pool of opportunities in the Nepali market and innovate.

His words to aspiring entrepreneurs: “Stop copying the market. Find something new, something nobody else is doing, and do it. You might find a whole new market. If you view entrepreneurship as a game, it’s hard to compete against existing big players. Either you need to create a sub market within an existing game or create a whole new game on your own,” he states.

“There are plenty of opportunities, a lot of money floating around here and a lot of stuff to do with it. People will spend it if you give them a good option.”