N S Ramnath &
V Balasubramanian
Chennai November 29
SENDING ripples across the Rs 1,200-crore
safety matches sector, ITC Ltd has launched five branded products- Mangaldeep, targeted at
housewives and Aim, D’lite, Vaxlite and iKono at smokers. This marks a significant
step in the evolution of what has largely been a commodity business into a branded one.
Since August this year, ITC had quietly
introduced these brands in the nine markets in the country- the four metros, besides
Hyderabad, Bangalore, Coimbatore and Guwahati. In a short period, ITC is said to have
garnered a significant market share.
It has drawn up plans to scale it up in the
coming months, using its three million- strong retail outlets and backed by an aggressive
marketing and advertising campaign. Significantly, ITC is sourcing the matches from 14
semi-mechanised units in Sivakasi, Kovilpatti, Sathur, Gudiattam and Rajapalayam, which
the company feels will provide a fillip to the small industry sector. Rajeev Gopal, the
CEO of the safety matches strategic business unit of ITC, told ET: "The rationale
behind entering the business is not only to use our distribution network but also to
leverage on our other businesses, including paper boards, packaging and printing
units." For the suppliers, this initiative will offer a ready business to the SSIs
with ITC taking up brand building, marketing and distribution exercises, he said. More
importantly, the units will have to implement management and quality processes, as
demanded by ITC.
Mr. Gopal said: "We have selected only
those units which are amenable to upgrade their production lines and quality and adopt
good management practices." He added that ITC will not manufacture these matches. The
company has specified in its contracts with the units that they shall not employ child
labour even remotely. The products are priced Rs 0.50, Rs 0.75, Rs 1 and Rs 3 and come
with features such as recipes, safety tips and puzzles.
According to industry sources, the country
manufactures about 24 billion match boxes. While Wimco, the only player in the mechanised
sector, has a market share of 15-16% Sivakasi-based Asia Match is the second largest
player with an estimated
8-9% share. Mr. Gopal said in addition to
building up the domestic to help the
small-scale units, ITC is looking at
tapping the export markets for the matches.
For ITC, the entry is in tune with its
strategy to expand its non-tobacco business with a series of FMCG products. It has already
built SBUs for greetings cards, confectionery and food processing. In India, the share of
cigarettes in the total tobacco consumption had dropped to 14% from 23% 10 years ago.
Beedis continue to dominate the tobacco market with 48%. Besides cigarettes, ITC has
interests in hotels, packaging, paperboards, IT, lifestyle retailing and agri exports.
