Request For Proposal (RFP)

Knowledge-based Integrated Sustainable Agriculture in Nepal (KISAN II) Project 

Request for Proposal (RFP) for Business Development Services to support the growth

acceleration of rice and feed mills to enhance their businesses and products.

1.  KISAN II Project Overview

The Knowledge-based Integrated Sustainable Agriculture in Nepal (KISAN) II Project started on July 12, 2017. The project’s overall goal is to increase the resilience, inclusiveness, and sustainability of income growth through agriculture development. KISAN II contributes to the objectives of the Government of Nepal’s Agriculture Development Strategy (ADS) and the US Government’s Feed the Future Initiative. The project is implemented by Winrock International as prime, in collaboration with three Nepali organizations as subcontractors: Center for Environmental and Agricultural Policy, Research, Extension and Development (CEAPRED), Development Project Service Center (DEPROSC), and Siddhartha Connecting Inc. Pvt. Ltd. (Siddharth Inc); and two international subcontractors, Digital Green Foundation, and Overseas Strategic Consulting, Ltd. (OSC). KISAN II focuses in 25 districts comprising the Feed the Future Zone of Influence (ZOI). 

KISAN II has five specific components:

Component 1:  Improved productivity of selected agricultural market systems

Component 2:  Strengthened competitiveness, resilience, and inclusiveness of selected agricultural market systems

Component 3:  Strengthened enabling environment of selected agricultural market systems

Component 4: Increased ability of vulnerable communities to act on business opportunities within selected market systems

Component 5: Collaboration, learning and adaptation (CLA) applied to market systems

Following are the districts of these provinces on which KISAN II is working:

• Bagmati province (4 districts): Kavrepalanchok, Makwanpur, Nuwakot, and Sindhupalchowk.
• Province 5 (10 districts): Arghakhanchi, Gulmi, Kapilvastu, Palpa, Banke, Bardiya, Dang, Pyuthan, Rolpa, and East Rukum.
• Karnali province (5 districts): Salyan, Surkhet, Dailekh, Jajarkot, and West Rukum.
• Sudur Paschim province (6 districts): Achham, Baitadi, Dadeldhura, Doti, Kailali, and Kanchanpur.

2. Background Information

Rice and maize are important crops in Nepal; they are staples for millions of households and contribute to national food security,and they are vital inputs to commercial processing industries that can serve as engines for broader economic growth. But despite government and donor support, Nepalese private companies face significant competition from Indian imports. Indian rice mills are more efficient at delivering medium and fine grain varieties, volumes, and consistent quality that Nepalese consumers demand. Meanwhile in Nepal, many small mills are struggling to remain in operation because they lack the capacity and capital to adopt to changing market scenario. At the same time, themedium and large rice millsare able to upgrade their technology and infrastructure to improve their processing capacity (e.g. milled fine rice, parboiled rice, other rice products), but tend to suffer from persistent technical and managerial inefficiencies. 

At the time when rice millers are battling to compete with international competitors, Nepalese feed industry is on a growth trajectory. Maize is the primary input for Nepal’s growing poultry and animal feed industry. However,due to an insufficient supply of domestically produced hybrid yellow maize varieties suitable for feed manufacturing, combined with poor drying and aggregation facilities, the feed industry currently procuresaround 90% of its maize from the international market. Consequently, the feed mills continue to face risks from external factors and look to minimize their dependence on the international market by diversifying their grain supply. While the feed mills have begun investing in grain storage to strengthen supply chain, most lack the technical competencies needed to properly manage the facilities. This inefficiency reduces profits and places a strain on the supply chain. If feed millers overcome issues of aggregation and drying and bring well-managed storage online to overcome supply gaps (and if price remains competitive), Nepal has an opportunity to compete with international imports through increased domestic maize production.

As detailed above, the rice and maize subsectors are on diverging paths but share similar constraints to achieving transformational growth. One universal constraint among market actors operating in these subsectors is weak management and poor operational practices, which has consequently contributed to decreased business efficiency and competitiveness. However, achieving transformational growth in these subsectors is constrained by several complex challenges: (i) weak organizational capacity among firms; (ii) low adoption of appropriate improved technologies and management practices; (iii) supply chain inefficiencies related to production volume, varietal selection, consistency and quality; and (iv) insufficient storage and product aggregation.Both subsectors require support to overcome existing technical gaps and inefficiencies. 

Effectively addressing the aforementioned issues faced by rice millers and feed mills in Nepal requires engaging companies that are driven, willing and capable of investing in bringing about transformative changes in their businesses.As private companies increase their capacity and improve their business practices, they will solidify their business base, generate additional profits for reinvestment through efficiency gains, and be able to scale.If improved practices and coordination are adopted subsector wide, it will stimulate increased investment and trigger transformational growth. Over the long term, this will allow market actors in Nepal to capture a greater portion of the market currently dominated by international grain imports.

It is important to note that additional profits and the dedicated efforts to improve the overall business efficiency of rice millers and feed mills should better enable them to invest in establishing stronger backward linkages with the producers to strengthen their supply chain.Amid global efforts to contain the spread of the covid-19 through the contamination of agriculture commodities, countries are likely to impose stronger trade restrictions in the future resulting in increased cost. Given the risk associated with such trade restrictions, rice millers and feed mills will need to focus of establishing building stronger backward linkages if they are to remain profitable and competitive in the changing business landscape.

3. Objective 

KISAN seeks to work closely with business development service (BDS) providers to provide and support in growth acceleration of Nepali firms (rice mills and feed mills) to enhance their businesses and products. Through this association, the associated firms shall be able to grow their ventures, create employment and maximize their profitability.

4. Scope of Work 

• In order to achieve the objective, the scope of work will be as follows:
• BDS provider and KISAN II will visit with all potential companies (rice mills and/or feed mills) interested in availing the business development services.
• Based on discussion with BDS provider, KISAN will shortlist 5 companies(rice mills and/or feed mills) to provide with business development services. 
• BDS provider will conduct a thorough analysis of each of the 5 company to understand and develop tailored solutions for the business growth strategies.
• Provide tailored mentorship (6 months) to selected companies in line with their respective business plan and growth strategies. The mentorship should focus to ensure increased profitability, improved business efficiency, increased market share and capture existing business opportunities.
• Support the 5 companies in establishing linkages with relevant service providers to become more competitive and growth oriented.
• Wherever feasible, integrate the services with the provincial joint work plan.

Successful delivery of quality business development services to the 5 selected companies is expected to enable the companies to actively implement tailored solutions and recommendations provided by the BDS provider. Subsequently, KISAN II will explore possible opportunities for collaboration with relevant private companies working in rice and maize sub-sectors, and BDS provider(s) to design and implement additional interventions that support transformational changes in the rice and maize sub-sectors.

5. Outcomes/Deliverables

• Profiling of all the selected companies (5 companies)
• Business plan of all the selected companies
• Plan of action including mentorship plan for each company
• Final report on BDS services to selected firms including clear instructions of future intervention plan.

6. Team Member

Advised to propose at least two core team members including CVfor this assignment.  Additional team members could be added with mutual discussion with K2, on need basis once the proposal is accepted.

7. Selection Criteria and Weightage 

The Service Provider company/firm will be selected based on the following weightage value of Technical and Financial Proposal.