Business conglomerate, ITC, is anticipating
30 per cent growth for its agarbatti (incense
sticks) division this financial year primarily
driven by increasing consumer franchise for its
‘Mangaldeep’ brand, combined with improved
distribution reach.
Mangaldeep is already the second-largest
national agarbatti brand, riding on the success
of two sub-brands, ‘Madhur 100’ and ‘Yantra’.
Sector analysts peg the agarbatti market at
around Rs 1,800 crore, and growing at 8-10 per
cent yearly. It is dominated by unorganised
players — some of whom do contract manufacturing
for organised players like ITC.
Around 10-11 small firms are engaged in
finishing the agarbattis and together they
supply about 180-200 million sticks per month to
ITC. These are marketed through half a million
retail outlets that distribute ITC’s other
products. The sticks are available at a price
between 8 paise and Re 1, with urban and rural
markets contributing equally to the turnover.
“We
are currently number 2 in the agarbatti industry
with our Mangaldeep brand, second only to the
Cycle brand of incense sticks. Our aim is to
grow the business by 30 per cent this financial
year by keeping our prices as low as 50 paise
per stick,” said V M Rajasekharan, chief
executive of the agarbatti division.
The
company is planning to extend its manufacturing
network, which currently employs over 5,000
people. ITC’s trade margins on agarbatti are
between 30 per cent and 35 per cent. Other
manufacturers offer margins of about 40 per
cent, but they say ITC products sell faster and
are, therefore, a more profitable proposition.
According to analysts, as ITC’s share of the
agarbatti market is less than 5 per cent, there
is ample scope for growth and promotion of new
manufacturing networks.
The
company is also planning to launch new products
in the ‘air care’ segment, to cater to the
growing popularity of aromatherapy and the
changing gifting habits in India. It will soon
introduce a premium agarbatti brand, priced at
Re 1 a stick. It also plans to launch premium
candles and other brand extensions, which would
also work as a nice gifting option.
“Currently, we have launched some aromatic
candles under the brand, Expressions, in select
markets as a test launch. We are planning new
brand extensions after the success of the
launch,” added Rajasekharan. ITC’s premium
candles would be priced between Rs 300 and Rs
450.
They
also plan brand extensions for Mangaldeep and to
launch newer fragrances. “Sandalwood for incense
sticks is one fragrance that is accepted
nationally. But we will also look at launching
fragrance that individual regions have a liking
for,” Rajasekharan said.
