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Topics: Value chain, Incense, Strategic management Pages: 81 (9805 words) Published: September 28, 2014
Value Chain Analysis Series No. 3

Value Chain Based Approach to Micro-Enterprise Development

Value Chain Analysis-Incense Sticks

Micro-Enterprise Development Programme (MEDEP)
Dhobighat, Lalitpur

December 2010

The Micro-Enterprise Development Programme (MEDEP) is a nationally executed project implemented by Ministry of Industry (MOI) with the technical and financial supports of the United Nations Development Programme (UNDP). The programme is funded by UNDP with additional support from the Australian Agency for International Development (AusAID). MEDEP which is now in its Third Phase (2008-2010) primarily aims at improving the livelihoods of low income families those living below the absolute poverty line through promotion of micro-enterprises and employment generation. The target groups of the programme are Women, Socially Excluded such as Dalits, Indigenous Nationalities (Adivashi-Janajatis), Religious Minorities, Unemployed Youths, People Living with HIV and AIDS (PLHA), Injecting Drug Users (IDUs) and Ex-Combatants Discharged from Maoist Cantonments. MEDEP has been working in several commodity sub sectors based on market demand, local resource potential, and needs and demands of target groups. The program is currently active in 36 districts, with total beneficiary number exceeding 50,000. There has been a significant contribution in enhancing the income levels of participating entrepreneurs. The MEDEP approach in value chain is in the process of internalization although the programme has been active in development of enterprises involving several commodities and products for last ten years. MEDEP primarily focuses on creating and sustaining micro entrepreneurs through their integration into the value chains and upgrading activities. In this context MEDEP initiated Value Chain Analyses of six selected commodities / products (Allo, Dhaka, Incense sticks, Orange, Lapsi, and Chyuri / herbal soap. These study reports are being finalized and disseminated by posting in the MEDEP website for the benefit of all chain actors and stakeholders. Incense making has been promoted as one of the important enterprises for the poor families as it requires very little initial investment and basic skill training. The incense sticks manufacturing enterprises have been beneficial to a large number of bamboo stick makers and also to micro-entrepreneurs who produce unscented or “blanks” for further value addition. Some entrepreneurs have successfully integrated the process up to scenting, packaging and marketing. Incense enterprises use powder extracted from Kaulo tree (Michilus odoratissima) as resin based binder that is abundantly available in Nepal. Considering the fact that the share of domestic production currently is just about half of the total market size estimated at close to Rs. one billion, there is a significant potential for this sub sector to extend the benefits to a larger number of producers. We are hopeful that the study will be useful to all value chain actors, and stakeholders in the Incense sticks sub sector to develop intervention strategies for the identified weaknesses and constraints at different levels of the value chain. Finally, we would like to offer our thanks to Dr. Bhimendra B. Katwal, Value Chain Development Consultant for taking the lead to complete this study, all field staff of MEDEP particularly APSO Udayapur, and APSO Bardibas for their support in data collection and for the stakeholders especially the participants in the Incense Value Chain Workshop held at Janakpur and final sharing workshop at Kathmandu for providing their valuable inputs and suggestions on the report.

Lakshman Pun, Ph.D.
National Programme Manager
December 2010

Dhundi Raj Pokharel
National Programme Director

Page ii


Selection of Value Chains for Promotion
Selected Commodities and Products for Promotion of
Value Chains

References: Range of Sindhuli District, 2064 (in Nepali)
GTZ, Honey in Nepal, Approach, Strategy and Intervention for Subsector Promotion, 2008
Haat Bazaar, Agarbatti, Kantipur Daily, October 26, 2009
MoICS, Micro Enterprise Policy 2064, Ministry of Industry, Commerce, and Supplies, Singha
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