Asian Biscuit and Confectionery launched its Goodlife biscuits in the domestic market six months ago. According to the company, the high-end biscuit has been getting a good response from customers.

“Customers are shifting to Nepali biscuits as the manufacturers are coming up with quality biscuits with their state-of-the-art infrastructure and best baking technology,” said Mahesh Jaju, managing director of Asian Biscuit. “Nowadays, we are focusing on making big investments in production and marketing and promotional campaigns in the domestic market.”

The company produces 25 varieties of biscuits — Crackies, Mixpix, Thin Arrowroot and Glucose among other spicy, salty and sweet biscuits from its plant with a capacity of 800 tonnes per month.

With an increasing number of people preferring to have sugar-free biscuits, the company plans to produce various types of sugar-free biscuits and biscuits made of oats along with various medium and premium products.

While foreign brands have been giving stiff competition to domestic brands, the manufacturers say that they now have to focus on better quality and tastier biscuits. Biscuit manufacturers say that that domestic production has a 60 percent share of the local market.

“If you look in department stores and big grocery stores, there is still a dominance of imported biscuits,” said Omnath Maharjan, chairman of Khajuriko Nepal. Although imported biscuits are relatively expensive compared to domestic products, people are found consuming them as their income level has grown. So domestic

manufacturers have been focussing on producing high-end biscuits lately.

“If you look at the quality of domestic biscuits over the last four to five years, there has been a significant quality enhancement in them,” said Bikram Karmacharya, director of Karmacharya Bakes and Foods.

Karmacharya has been producing 20 different types of biscuits for a decade from its plant having a capacity of 25 tonnes per month. Despite stiff competition from foreign brands, domestic industry has also been growing and its size is estimated to have reached Rs 5 billion.

“The domestic biscuit market has been growing at the rate of 10-12 percent,” said Homnath Neupane, chief executive officer of Nebico Biscuits, one of the prominent names in the biscuit industry. “As Nepali factories have been offering quality products and investing a lot in marketing activities, their market has also grown.” Nebico manufactures 29 varieties in different flavours — salty and sweet including Glucose, Digestive, Trekker’s Choice and Coconut. According to Neupane, its plant has a production capacity of 1,500 tonnes monthly. However, it operates at 50 percent of capacity.

As Nepal is an emerging market for biscuits, not only domestic brands but also international companies have been attracted here. Multinational companies have started producing biscuits in Nepal too. Indian manufacturer Parle Products has opened a plant in Nepal. Another Indian brand Britannia also manufactures biscuit in the country in a leased plant of Hulas Biscuits.

Despite the increasing market for biscuits, Nepali manufacturers have not been able to raise production. According to a Nepal Rastra Bank study done in 47 districts including eight major cities, 14,240 tonnes of biscuits were produced during the first half of the current fiscal year. The overall capacity utilization of the biscuit industry during the period stood at just 45 percent due to load-shedding and higher input costs. The country produced 45,537 tonnes of biscuit in the last fiscal year, according to Economic Survey 2012-13.

Manufacturers said that lack of electricity, high import duties on raw materials and rising prices of wheat flour were among the issues which needed to be addressed to ensure development of the biscuit industry.

Maharjan of Khajuriko Nepal said that high input costs had discouraged manufacturers from operating their factories at full capacity. Khajuriko has been operating for 18 years and produces 12 varieties of biscuits.