Based in Kathmandu, the capital of the Federal Democratic Republic of Nepal (Nepal), Himalayan Bio Trade Private Limited (HBTL) was founded in 2000 in order to process and market forest-derived products made by members of the Nepalese rural community.
Through local, national and international partnerships, the community owned organization has raised the skill level of local craftsmen and women in the country, standardized their production methods, and improved product quality. Moreover, by successfully introducing traditional Nepalese crafts into the regional and international market, HBTL has raised the economic well-being of producers and ensured the delicate environment upon which their livelihood depends is preserved.
Nepal is endowed with plentiful human and natural resources. The country has a diverse array of traditional knowledge that has been passed down the generations of craftsmen and women, who have also relied on the country’s flora and fauna for their subsistence. Known to be strong and durable, nettle (Girardinia diversifolia) and hemp (Cannabis sativa), have been used for manufacturing clothes in Nepal since time immemorial.
Indigenous communities living in the hillsides of the country have relied on the bark of plants such as hemp because of the unique qualities of its fibers which include strength, smoothness, and lightness. Through traditional treatments of these fibers, Nepalese craftswomen have been able to achieve a luster similar to silk that can be spun into wool and woven on a handloom in order to produce material for creating clothing and other items.
The bark of the Lokta shrub (Daphne bholua and Daphne papyracea, both evergreen shrubs), moreover, has been traditionally used in Nepal to manufacture handmade paper. Abundantly grown as understory shrubs (or the lowest level within a forest) on the slopes of the Himalayan Mountains (between 1800 meters to 3600m above sea level) in the country, this high elevation plant has been harvested, pulped, spread, dried and prepared to manufacture religious and Nepalese government documents (including birth and land certificates) since the 12th century.
Such plants and other forest flora have provided precious raw materials for a burgeoning crafts industry in the country. Mindful of this illustrious heritage, HBTL has worked with Nepalese rural communities and national and international partners in order to raise the social profile and economic capacity of traditional craftsmen and women. In so doing, the organization has managed to bring their traditional knowledge and crafts to the national and international market while preserving their environment.
Through research and development (R&D), and via key strategic partnerships and cost effective financing provided by national and international organizations, the crafts industry in Nepal has been revived from the brink of collapse. The need to develop the country’s traditional crafts had become apparent following its decline due to an influx of competitive goods from neighboring countries including India and the People’s Republic of China (China).
However, the local industry’s R&D fortunes began to improve after 1980 when strategic and financial support was provided by several agencies including the United Nations Children’s Fund (UNICEF), who initially provided non-monetary, specialist support. Other kinds of support was provided by the Agricultural Development Bank of Nepal, a leading rural credit provider in the country; the Small Farmer Development Program, a facility that was established by the Nepalese government in order to provide micro-finance loans to farmers; and, Bhaktapur Craft Printers (BCP) – a quasigovernmental paper crafts production factory established in this period in Kathmandu, Nepal.
Launched in 1980 with the intention of reviving the country’s papermaking industry, the Handmade Paper Project (HPP), for example, was a pilot program and feasibility study (including research into sustainable Lokta harvesting methods supported by UNICEF) by these agencies whose success showed how both profit and rural development could be achieved.
HPP’s main focus was rural communities with small-scale enterprises that manufacture non-timber forest products (NTFPs). A market for products emanating from the papermaking initiative (such as postcards manufactured by BCP) was ensured via a guaranteed buyer: UNICEF’s Greetings Card Operations – a project by the UN organization to raise funds for its aims via sales of postcards, including Lokta paper based cards sourced from Nepal. With 25% of the profits earned by BCP being invested in community projects in the country, the HPP initiative became an inspiring model in Nepal.
In 1992, Asia Network for Sustainable Agriculture and Bioresources (ANSAB), a non-governmental organization (NGO), was established in Kathmandu with a mandate for sustainable development and environmental conservation in the region. ANSAB subsequently established HBTL as a community-based organization that has provided marketing assistance to Nepalese rural consortiums that use NTFPs. Indeed, HBTL has worked with its parent organization in collaboration with Nepalese entrepreneurs such as Parbat Gurung, a businessman who has been Managing Director of the community organization since 2001.
As the head of HBTL, Mr. Gurung has driven through structural changes and projects that helped to upgrade the skills level and business capability of traditional crafts communities in Nepal via collaborations with international partners. Among its many capacity building partners and financial backers, HBTL has worked with Aveda Corporation (Aveda), an established cosmetics manufacturer based in Blaine, the state of Minnesota, in the United States of America (USA). Other HBTL partners have included Wildlife Friendly Enterprise Network (WFEN), an organization dedicated to promoting and certifying environmentally friendly community businesses from its base in the state of Florida, the USA; the United States Agency for International Development (USAID), an organ of the US government; and, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), an international development organization based in Eschborn, Hesse, in Germany.
With the support of its partners, in 2002 HBTL and other community enterprises and cooperatives in the country formed Public Private Alliance (PPA was formed with the coordination of ANSAB and Aveda and based on funding by USAID), an association through which forest certification, product development and international market advice was provided to rural craftsmen. By working with Aveda’s experts over a four year period, for instance, PPA members – including HBTL – were able to improve the design, price, packaging and quality of Lokta paper products in Nepal.
The community organization was also able to gain a firm understanding of key international market trends (for natural, high quality, NTFPs such as essential oils) including that of the European Union (EU), India, and the USA. These trends were gleaned from market reports, interviews with potential buyers in prospective markets, and seminars provided by ANSAB and GTZ. Based on the strategic advice and financial support of industry partners, therefore, HBTL was able to increase the capacity of its manufacturing facilities by implementing the latest, internationally recognized production standards and procedures. Subsequently, the community organization has increased its access to the global market while improving the capacity of its craftsmen and women and facilities in order to produce quality and desirable goods.
Desiring to enter the international market, HBTL has worked hard on diversifying and distinguishing its brands, establishing international standards in its production processes, and developing a sound marketing strategy. Working with stakeholders, the community based organization took the strategic decision to enter the niche market of organically produced goods.
In support of this decision, HBTL has invested in industry certification for organic production including those provided by WFEN (an internationally renowned certifier of naturally produced goods) and the Forest Stewardship Council (FSC) – an independent NGO that has promoted sustainable forest management policies and accreditation services around the world.
The farmers’ organization, for instance, has implemented FSC’s Cradle to Cradle certification which ensures progressive production processes (including the use of organic farming methods void of chemical fertilizers) that are favorable to human health while protecting the environment. With sound organic credentials and other international certifications at the core of its production processes, HBTL has been able to market its products in the EU – a region which has had a thriving market for organic products.
Moreover, in order to reach clients and customers around the world, HBTL has established a strong marketing strategy that includes participation in well-known industry trade fairs and events such as BioFach – a global trade fair for organic goods producers based in Nuremburg, in the state of Bavaria, Germany. Timed to coincide with the 2011 BioFach fair, the producers’ organization and its partners – including other Nepali cooperatives – joined forces and produced a collective brand called “Nepali Delegation”.
Intended to create awareness among clients of Nepalese products, the brand has appeared on HBTL’s product brochures and thus helped to spark general interest in Nepalese goods. In addition to marketing its products via collaborations with international fairs organizers, the producers’ organization has relied on commercialization partnerships with major cosmetics manufacturers such as Aveda – a skincare and hair products producer with a well-established reputation for sourcing materials from marginalized communities.
Since 2007, Aveda has sourced attractive blue, black, red, yellow and green handmade Lokta paper from HBTL in order to package its range of “Holiday Gift Set” cosmetic brands – called Hand Relief and Foot Relief (both being moisturizers). Not only have these brands raised the corporate profile of Aveda; they have also enhanced the profile and reputation of HBTL and its producers while opening new commercialization avenues for their products.
Indeed, in 2011 the American company bought over 350,000 sheets of handmade Lokta paper from HBTL. Aveda, moreover, has been keen to promote its procurement relationship with the Nepali organization including via direct marketing campaigns for consumers on the company’s corporate website. Furthermore, the Nepali crafts organization has itself developed a stylish and customer friendly website (where customers can peruse HBTL’s products), further enhancing its reputation on the Internet and internationally.
Having established a strong brand image on the Internet, raised Nepali Delegation brand awareness internationally, and entrenched high quality production processes, the organization has diversified its product portfolio to meet a growing market for non-timber forest products. HBTL offers a vast range of certified, natural, and organic products including Nepali handmade Lokta paper, hemp and nettle clothing and accessories (such as folders, journals, notebooks, lampshades, and business cards).
Other products in the organization’s portfolio include wild crafted essential oils (such as Abies oil, Anthopogon oil, Artemisia oil, Calamus oil, Jatamansi oil, Juniper oil, Valerian oil, Wintergreen oil and Zanthoxylum oil); cultivated items of essential oils (such as Chamomile oil, Citronella oil, Eucalyptus oil, French basil oil, Lemongrass oil, Mentha oil, and Palmarosa oil); raw herbs; and vegetable oils.
As of 2012, the community based organization commercialized its products both locally (through networks of distributors in Nepal such as Deudhunga Cooperative Ltd, Malika Handmade Paper Pvt. Ltd and Everest Gateway Herbs Pvt. Ltd) and internationally to several countries and regions including the Commonwealth of Australia, the EU, India, Japan, the Republic of Korea, and the USA.
HBTL and its partners have been aware of the importance of the intellectual property (IP) system as a means of securing IP assets, distinguishing goods in a competitive global market, and reaping a return on investment. To this end, Aveda registered two trademarks (in 2008) for Foot Relief and Hand Relief via the United States Patent and Trademark Office (USPTO). Both brands’ external packaging was made of attractive paper sourced from HBTL.
In 2010, moreover, the cosmetics maker secured its IP in the EU via a trademark registration for Aveda Hand Relief™ at the Office for Harmonization in the Internal Market (OHIM). In part because these trademarked brands have had success in the market, and due to Aveda’s product promotion campaigns (which have highlighted the relationship with HBTL), both the community organization and the cosmetics maker have benefited financially from the goodwill and product awareness achieved by Aveda’s IP protected assets.
As Aveda’s trademarked products have flourished, the cosmetics company has not only been able to continue sourcing products from rural communities including HBTL; Aveda has also supported the Nepali organization’s development by making investments in order to raise its paper production standards. Due to the alliance with Aveda, the producers’ organization was awarded the Chain of Custody accreditation (which ensures traceability of forest products to their place of origin in aid of sustainability) by the FSC.
As the Executive Director of ANSAB said, “The effective collaboration between Aveda [and HBTL] is a result of years of coordinated effort in strengthening the capacity of community forest user groups and community-based forest enterprises to [sustainably] develop the forest products value chains.” Customers who buy Aveda products sourced from HBTL are thereby assured of its origins and standards. Meanwhile, the cosmetics company and, by extension, business partners such as HBTL, have enjoyed mutually enriching financial partnerships and enhanced profiles supported by the IP system.
In the Himalayan Mountains of Nepal, Grey wolves, Himalayan Tahrs (a large, hoofed animal related to the Wild goat), Snow leopards, Musk deer, Red pandas, and Wild yaks have cohabited with their human and plant neighbors for centuries. The region’s flora & fauna, however, have come under increasing threat from human poachers and illegal harvesters (of medicinal plants, for instance).
As 76% of the country’s labor force has relied on forest products for their livelihood, and because agriculture has provided 33% of gross domestic product – GDP (2009 estimates of the Central Intelligence Agency of the USA government), organizations that support rural workers – including HBTL – have had to establish environmentally sustainable production policies.
To this end, the producers’ organization has worked closely with rural communities, the Nepalese government and international partners to establish a comprehensive program for forest management. Indeed, as far back as 1978 the Nepalese government had devolved some forest management responsibility to rural users by permitting forest-reliant producers to harvest, use or sell timber and NTFPs via registered community forest user groups (CFUGs). Through this simplified and legalized initiative, the government ensured that such communities had a stake in their own economic outcomes and the environment on which their fortunes depended.
In support of CUFGs and other initiatives, HBTL has worked with ANSAB and other industry partners including USAID; Stichting Nederlandse Vrijwilligers (SNV), a rural development NGO based in the Netherlands; and, Rainforest Alliance, a biodiversity conservation NGO based in New York City, in the State of New York, USA. With the support of Rainforest Alliance’s strict FSC certification and verification program (called SmartWood), for example, the community organization has been able to ensure that its products are made of NTFPs that are verifiably traceable to their source.
Moreover, HBTL was awarded the FSC certification in 2005 (courtesy of the alliance with Aveda) which covered 11 CFUGs (10,500 hectares of forest) in the biodiversity rich districts of Dolakha and Bajhang – a region where over half of the land is forest and the rest pasture or land reserved for agriculture. The FSC certificate for HBTL’s use of NTFPs, furthermore, was the fifth of its kind to be awarded worldwide, the first in Asia, and the first to include handmade paper. FSC certificates in the region have subsequently been expanded to include 21 CFUGs in Dolakha and Bajhang, covering 14,086 hectares of forest (for NTFPs and timber), 7,500 households, and 40,000 people.
Since its establishment, HBTL has managed a tremendous transformation in the environment in parts of Nepal and in the lives and economic well-being of its members. Because of the organization’s CFUG monitoring programs (which cover deforestation and poaching over an area of 85,000 hectares), wildlife in the monitored zones has been preserved, rural employment has been increased, and the socio-economic status of mountain communities has been developed.
For instance, estimates show that up to US$ 5.54 million extra in income has been created for 65,000 men and women in this region. Indeed, there has been an upsurge in the country’s handmade paper industry which was revived and expanded by 22% annually up until 2004. Although growth in the industry slowed up until 2009, according to the Federation of Handicraft Associations of Nepal the export of handmade paper products (which constitutes the great majority of sales) was about US$3.59 million (representing about 10% of the total export handicraft market).
Handmade paper products, moreover, are the fifth largest export product in the handicraft category in the country. Furthermore, among the 21 HBTL and Aveda partner communities in Nepal, household income has risen 318% and migration for work into large cities has been reduced by 15% in three years (up to 2009) in the country. In 2009, HBTLwas the ninth largest handicrafts exporter in Nepal. The organization’s sales to Aveda have varied between US$ 60,000 (2007), US$115,000 (2008), US$96,000 (2009), US$360,000 (2011) and US$330,000 (2012) but they have represented 85% of the community organization’s income. HBTL has continued to work directly with over 4,155 families (or about 21,000 people of whom 80% are women) across sixteen of Nepal’s seventy-five districts.
HBTL has managed to tap into the cultural and natural resources of Nepal, inspire its people, and enter the international market with well made, high quality and desirable products. Having formed key national and international partnerships, the community owned organization entered commercialization agreements with companies such as Aveda whose successful products and brands, some of which are sourced from HBTL and supported by IP assets, have resulted in mutually beneficial returns on investment. As the capacity and income of its members continue to grow and diversify, HBTL has ensured that the environment on which they depend is preserved for future generations of humans and other flora and fauna.
This case study is based on information from: