Kingdom Essences (K Essences), an essential oil production business based in Trongsa, which was started with a capital of Nu 350,000 has secured investment of Nu 2.25mn through the Jabchor platform from individual investors.
Three individual investors have invested the equity ownership in K Essence. The private individuals are Sonam Choden Dorji invested equity ownership of 10% with Nu 1.5mn and Thinley Choden and Tashi Rinzing Schmidt invested equity ownership of 5% of Nu 0.75mn. Naturally Bhutan has invested 5% as the strategic partnership.
It is the first kind of business having multiple investors investing the money. Soon after, they submitted project proposal to Loden Foundation and received an interest-free loan of Nu 1000,000 which was injected into the business as working capital.
Kuenga Dhendup initially started the business with amount of Nu 350,000 borrowing from his family.
After completing college, Kuenga Dhendup went back to his village at Nubi gewog in Trongsa to start an organic farm. In 2015, he became an entrepreneur and leased underused government facility that was established in order to help the farmers in Nubi gewog with value addition of their farm produce.
In 2016, his co-founder Pema C. Gyaltshen joined the business and began purchasing various kinds of agricultural produce from the farmers for value addition, started research and experimentations on locally available medicinal and aromatic plants by extracting it’s essential oils.
Kuenga Dhendup said that in 2016 they were blessed with an opportunity to meet with His Majesty The King after the National Day celebrations at Trongsa.
He said that in 2017 with His Majesty The King’s grant, they received a training on essential oils and product formulation using essential oils, at Lanadene cosmetics school at Mae Fah Luang university at Chiangrai, Thailand.
He said that in 2018 with the help of the training, they were able to introduce Kingdom Essences to the local market.
In 2019 with the help of Jabchor, they received an opportunity to present their business idea during the BEFIT event which allowed them exposure to local angel investors.
“This event greatly benefitted us by helping us bring in strategic and financial partners into the business. Jabchor was an eye opening event for us as it taught us how to look at our business in depth. We learnt how to structure the financial aspects of the business while also learning about business valuation, shareholding laws, and marketing,” said Kuenga.
He said that their motive is to promote natural healing using medicinal plants that have long been used in Bhutanese traditional healing practices, in the modern form of aromatherapy.
He also said that by sourcing local raw materials from farmers in rural parts of Bhutan, they ensure an equitable sharing of benefits through social inclusion focusing on sustainable development.
“We aim to utilize 100% local ingredients in our products to provide a wellbeing service that is truly and authentically Bhutanese,” he said.
In order to meet the market demands, they acquired additional funds to scale up production which can in turn bring down the cost of production and make products affordable for local consumers.
“With the additional fund of Nu 2.25mn acquired from investors, we will be setting up our manufacturing unit at our organic farm located at Kaba village of Nubi Gewog, purchase larger manufacturing equipment and better packaging materials for our products,” he said.
One of the investors Thinley Choden said that she choose to invest in K Essences because she can see the potential of scaling of in the business in future.
“The business also benefits more than 100 rural farmers in the central Bhutan,” she said, adding that they are very young and enthusiastic entrepreneurs.
She expects that that the business will scale up the production and their branding will be stronger.
She said that investors rather than investing in real estate should invest in young entrepreneurs so that it will add value and economy in the country.
The founder of Naturally Bhutan, Rabsel Dorji said that they are also entrepreneurs and they want to promote K Essences products.
He said that they will be improving packaging, labeling and quality of products and within a year they will export internationally.
K Essences and the investors signed memorandum of understanding last week.
On the season 2 Jabchor platform organized under the banner of BEFIT 2019, five selected and groomed entrepreneurs also pitched their business ideas to a much bigger platform of both local and international investors.
Observing the progress and need for improving the Jabchor platform, the central bank now plans to formally institutionalize Jabchor with BCCI spearheading the entire grooming, incubation and other facilitation support. Season 3 Jabchor will soon convene once the institutionalization process is formally completed.
Jabchor is an initiative to partner with innovative entrepreneurs and grow with into a successful venture, based on trust and confidence supported by legally executed business partnership deed, recognized by laws of the Bhutan. The Jabchor ventures will help investor enter into a financial partnership with a trust worthy entrepreneur, who will give meaning to investment and function within a legally defined relation to help earn dividends, both in cash and goodwill.
Dechen Dolkar from Thimphu