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ITC plans big for N-E markets
The Telegraph - 24 Jun 2012

Guwahati, June 24: The Rs 36,000-crore diversified conglomerate, ITC  Limited, is setting up supply centres in the Northeast to cater to local  markets in the food segment.

The move comes at a time when companies are making huge investments in  the region, giving a fillip to its economic development.

"The company is making significant investments and is going forward in  having supply centres closer to the Northeast and in the region itself to  feedstock to these markets in the foods segment," an ITC spokesperson told The  Telegraph.

Supply centres offer both manufacturing as well as warehousing  facilities.

"The plan to have supply centres here is because of the excellent demand  for our products," the official said.

The Guwahati branch office, which is responsible for the entire region,  is among the company's top performing branches in the country.

The Northeast offers a huge market for the private sector and a number  of companies, given the good response, have chalked up plans for expansion.

Some companies have taken help of the attractive industrial policies of  the state, while others have come on their own.

Assam industry and commerce minister Pradyut Bordoloi said 336  investment proposals valued at Rs 38,000 crore had been received by states of  the region under the North East Industrial and Investment Promotion Policy. Of  these, 70 per cent have borne fruit.

ITC and the Assam government are discussing the setting up of an  integrated food manufacturing facility in the state to cater to the growing  demand for its products in the Northeast. "It is a recent development and this  is because of the excellent demand for our products," the official said.

The company has a significant presence in the region in the branded  packaged foods segment and has a better than average growth rate.

ITC is one of India's foremost private sector companies and has a  diversified presence in cigarettes, hotels, paperboards and others FMCG  products and is rapidly gaining market share even in its nascent businesses of  packaged foods and confectionery, branded apparel, personal care and  stationery.

The official said the main reason for the success of the company in the  region is the presence of a good on-ground supply chain and distribution  infrastructure. In addition to that, the high quality of its products has led  to good consumer acceptance here. "The company's differentiated products across  segments delight consumers in the Northeast with their superior value  proposition," he said.

In the education and stationery products sector, Classmate is the  stationery brand of choice among students of the region. "Our distribution  network reaches all corners of the region and the market share of Classmate  notebooks in the Northeast is more than double that of our all-India market  share of 15 per cent," the official said.

ITC entered the education and stationery business with its premium  Paperkraft brand in 2002 and later expanded into the popular segment with its  Classmate brand in 2003. By 2007, Classmate became the largest Notebook brand in  the country. Together, Classmate and Paperkraft offer a range of products in  the education and stationery space to the discerning consumer, providing  unrivalled value in terms of products and price.

Another product of the company, Vivel soap, has become the number one  brand in Assam (according to AC Nielsen March 2012 survey for the mid-popular  segment) and is growing fast.

In the incense sticks sector, the company also sources from Tripura and  has helped create sustainable livelihood opportunities for rural women through  agarbatti rolling.

The Northeast contributes around 90 per cent of the incense sticks  produced in the country, out of which Tripura alone contributes around 70 per cent.

In the cigarette sector, the official said the region's industry was  challenged by extremely high taxation, which has spawned a rapidly growing  illegal trade in tax-evaded cigarettes as well as contraband trade by  smugglers.