Ram Bahadur Ramauli, 60, is a well known name associated with incense stick enterprise in Bhuchakrapur VDC of Dhanusha District. Vocationally, Ram Bahadur was a farmer having small land holding. The production of crops and vegetables from his limited areas of land was not enough to feed his growing family and to meet other basic requirements. He was desperately looking for extra earning to supplement his family needs. He was also worrying about the hundreds of other neighboring families living in extreme poverty and deeply looking for possible employment opportunities for them too. He used to be a village leader and social worker also.

One fine day, he heard about Micro-enterprise Development Programme (MEDEP). Coincidently, he also found that a son of one of his fellow villager is working in MEDEP. He immediately decided to meet him and get advice if some income generating opportunity can be explored for those unemployed women in the village. He met the person and discussed on the possible ways to get employment for those hundreds of unemployed women and men in his village and earn extra income. The person he met and discussed was none other than one of the MEDEP's field staff Mr. Rakesh Jha. After an extensive discussion and suggestion by Mr. Jha, Ram Bahadur promptly identified incense stick making as an appropriate enterprise for him and his fellow villagers especially for those poor women. Then he requested the MEDEP field staff to organize a training on incense stick making.

As requested by Ram Bahadur, MEDEP staff working in Dhanusha conducted entrepreneurship development training to the potential entreprenuers in his village where ten women including himself took part in the training and learned on how to be an entrepreneur. Following the entrepreneurship training, MEDEP in partnership with Cottage and Small Industries, Dhanusha organized a technical skill training for them on 'know how' of making the incense sticks. After the technical skill training, a group of ten women decided to start making incense stick, however they urgently needed some money to buy the raw materials required for making incense stick. With the recommendation of Cottage and Small Industries, Dhanusha and facilitation of MEDEP's field staff, Agriculture Development Bank, Branch Office Dhalkebar provided them loan of Rs. 5000 each making a group fund of Rs. 50,000 to start the incense stick making as a community enterprise. This is how they have been able to start the enterprise. The enterprise is now growing to a business scale. The concept of 'one village one product' is truly working here. Anyone visiting the Bhuchakrapur village can see women of all age from every households making incense sticks. Since most of them do not have farming land, incense stick making has been their full time enterprise.

But at some point of time in the past, due to high cost of raw materials, very low profit margin (up to 5 percent only) and problem in the marketing of the products, member of the group become de-motivated resulting to the downsizing of the enterprise after some months of operating. However, to rescue enterprise from the deteriorating situation, Ram Bahadur, being a founder member and village leader , took lead to the management responsibility of the enterprise and the marketing of the products . He dared to take risk, purchased all the products of the group and delivered to traders through different marketing outlet. Gradually, the product picked up the market and thereby getting improvement in the turnover. Still the value addition was too low i.e. about 10 percent because of the raw materials he had to import from India at high prices.

The major raw materials needed for the incense stick enterprise are Jicket powder, bamboo sticks, charcoal powder, red powder and scent. He was looking alternative ways to minimize the cost of production, for which he had to get raw materials locally in cheaper price. Indeed, all these raw materials, except scent, are non-timber forest product available plenty in Nepal.

One day when Ram Bahadur has gone to Titariya village of Siraha District to see his relatives, he saw some of his relatives mixing some sticking substance made from tree bark with dough prepared for making doughnuts. The curious Ram Bahadur inquired about the substance and found that the substance is the powder made from the bark of Kaulo (??) tree. Later he could confirm that this is one of the main raw materials he used to buy from India in the name of Jicket powder for Rs. 120 per kilogram. He then contacted to District Forest Officer and Community Forestry Group and made arrangement to buy the bark of Kaulo trees. He has made an arrangement to purchase Kaulo bark (raw material for jacket powder) from Community Forest Users Group in Sindhuli and Udayapur at Rs. 40 for dried and Rs. 12 per kg. for fresh bark. The fresh bark is then dried and grinded. The grinded powder is used as binding material for the incense stick. Similarly, he could manage to get bamboo sticks, charcoal powder and red powder locally too. With this new arrangement for the raw materials, he could reduce the cost of production and thereby maximizing the profit margin. According to him, at present he is making up to 15 percent profit while sold in loose and up 80 percent profit while sold finished product with packing. Currently, he sells about 2 metric tons per month of incense sticks to different traders in Janakpur at the rate of Rs. 63 per Kg and making about 10 to 15 percent net profit.

The enterprise is now well established and providing employment to 150 poor women on regular and fulltime basis. Now Ram Bahadur seems to be happy with his business and tends to expand up the enterprise so that he can create more employment for the poor unemployed families in the village.

Thus, incense stick enterprises in Dhanusha witnessed ups and downs mainly due to raw materials and marketing problems. But gradually, these problems have been resolved by the innovativeness of entrepreneurs themselves and the support of MEDEP, UNDP. According to Ram Bahadur one main problem incense stick entrepreneurs still facing is lack of standardization in packing. He tried to get the packing materials prepared in Nepal but due to high cost (Rs. 2.50 per piece) it has not been feasible. "Though it is cheaper to get packing materials from India but Indian suppliers do not accept order less than 100,000 piece at a time and that too with advance payment. For poor micro-entrepreneurs this is also not that feasible", Ram Bahadur said.