Hiccups in the herbal industry

Illegal trade is a major challenge in the local herbal industry

Abhilasha Rayamajhi

Herbs have always been an indispensable part of our lives since ancient times for holistic wellbeing. They have immense healing power for almost all illnesses and increases immunity and balances overall human system. The Himalayan region of Nepal is a rich reservoir for medicinal plants and aromatic herbs that have exceptional benefits to the human body and mind. Similarly, rich bio-diversity and climatic conditions makes it possible for thousands of herbs to grow all over the country.

There are numerous herbal companies that have emerged and there are a few well-established local industries in Nepal. But the herbal industry of Nepal is dominated by foreign companies and the industry is fragmented. Despite numerous advantages of herbs and medicinal plants the herbal medicines and food supplements do not occupy significant market share. The herbal industry of Nepal struggles and faces uncountable challenges.



Illegal trade of herbs

Govinda Sharma Dhakal, Senior Pharmacist of Sighadurbar Vaidyakhana, oldest ayurvedic and herbal government owned company in Nepal run under Ministry of Health, says, “Illegal trade is a major problem in ayurvedic and herbal industry. Some of our valuable raw materials are traded illegally to India and we again have to purchase them back at a higher rate”. He adds that due to this difficulty they do not get the quality and quantity of raw materials required to manufacture standard herbal and ayurvedic products. This challenge further creates price fluctuation in the market.

Lack of standardised certification

Most of the herbal products are limited only to the local market. The Nepali food supplements and ayurvedic medicines do not get access to international markets because of certification issues. As per the industrialists, there is no institution that provides certificate of standardisation to the herbal products. Similarly, according to Abeeral Thapa, Owner of Nepal Sanjiwani Herbal Industry, “There is no proper lab in Nepal where we can certify or test our products which makes it difficult for us to export in the international market”.

Dr Pankaj Raturi, Head of Medicinal Plant Division, Dabur Nepal, says, “Herbal adulteration is one of the common malpractices in trading herbal products in Nepal. As there the laboratories in the country have limited capability to test and certify the herbs, there is a practice of mixing or substituting the original herbs with inferior and even with similar looking plants. Furthermore there are challenges with respect to storage and packaging of these herbs.”



Ambiguous legal policies

Dhakal also emphasised on the delay in operations created due to ambiguous policies and bureaucratic hurdles. He says, “The legal policies regarding allopathic and herbal products are unclear”. He adds that private herbal companies enjoy freedom in pricing and decision making. However, the government companies cannot make prompt decision which is a setback to the entire industry.

He shares, “Shringa Bhasma is an ayurvedic medicine prepared from deer horn which helps cure gastric and abdominal pain. Now, government has put a ban on trading deer horn but some private companies still manufacture and sell it”. The laws are ambiguous and strict monitoring is not in place, according to him.



Competition in the domestic market

“The market for herbal industry is limited to domestic market and competition is stiff,” says Lumesh Kumar Mishra, Marketing Manager, Gorkha Ayurved, a private joint venture. He says that it is difficult for small herbal companies to compete with giant multinational players in the market. He suggests that the government must make strict policies to support the growth and expansion of local herbal industries. Dhakal says that the government has allocated less dealer margin. Therefore, they struggle to compete with other medicinal products in the market.



Lack of technology and innovation

Foreign companies brand and package their products using advanced technologies. However, the local companies struggle in packaging and labelling as advanced technologies are yet to be introduced in Nepal. In the words of Thapa, “We have to import packaging materials from other countries as it is unavailable in the Nepali market.” He also claims that herbal companies produce similar products and lacks innovation.


Nil marketing and branding

Herbal products and food supplements of local industries are ignored by majority of the customers also because of lack of marketing and branding efforts. Mishra says, “The local herbal industries must aggressively market its products if it aims to increase its market share.” Marketers must come up with innovative ideas and strategise to promote its products. In case of herbal industries mostly traditional media has only been used to create demand.

What can be done?

Industrialists suggest that government should be clear about segregation of policies for allopathic and herbal products. Further, certification system, testing labs and research centres must be encouraged to be established. Moreover, the government should introduce policies specifically to product the local herbal industries of Nepal as per the industrialists.

According to Raturi, to ensure sustainability of the herbal industry in Nepal certain policies must be made at the governmental level outlining the norms of both herbal trade and its usage. He says, “As adulteration and substitution has become a major issue, these policies should also incorporate stringent quality control measures and requisite procedures to counter the same. Furthermore, necessary infrastructure needs to be set up in order to facilitate proper production, storage and processing of herbal products.”

(The article was published on September 6, 2015 on The Himalayan Times Perspectives, page 5, industryinsight.)


photo: plentywell.com