ITC Logo
Media Centre
Press Report

ITC signs MoU with ORMAS for marketing raw agarbattis
Economic Times - 14 Oct 2009

Fast moving consumer goods major ITC Wednesday signed a MoU with Orissa government run Orissa Rural Development and Marketing Society (ORMAS) for marketing raw incense sticks in the state - a move that officials say will provide additional income to more than 3,000 rural women.

The agreement was signed by the chief executive of ORMAS B.N. Das, and ITC Agarbatti division chief executive officer V M Rajasekharan in the presence of Chief Minister Naveen Patnaik and other top state government officials.

As per the MoU, ITC will facilitate marketing of raw agarbattis (incense sticks) produced by rural women to vendors supplying Mandaldeep brands to the FMCG giant. The project is expected to provide employment opportunities to over 3,212 people, including 2487 women self-help groups.

“ITC’s partnership with ORMAS will not only help establish a supply chain model for raw battis but also contribute to value addition through the establishment of a perfuming and packaging centre for Mangaldeep brand agarbattis in Orissa in the near future,” Mr Rajasekharan on Wednesday told “The ET”.

ITC has also assured the state government to set up a scented and packaging unit in Bhubaneswar soon.

A large number of women are involved in rolling agarbattis which are used by ITC - one of the leading marketers of incense sticks manufactured by the small scale sector in India.

ITC’s “Mangaldeep” is one of the leading agarbatti brands in India and has a market share of 6% and second largest agarbatti producers in the country.

 A beaming chief minister complimented ITC for the innovative initiative saying that the move would empower rural women with additional source of livelihood.

A large number of women in Orissa are involved in rolling agarbattis. The state also is rich in bamboos and other raw materials required for making raw agarbattis. “We decided to take help of ORMAS which can mobilize the women self help groups to making the agarbattis. This will also go a long way to ensure livelihood to thousands of rural women contributing to ITC’s triple bottom line philosophy of simultaneously augmenting economic, environmental and social capital”, Mr Rajasekharan remarked.

ITC has lined up with 13 SSI units, of which seven has got ISO certification, across the country for the final agarbatti products packaged keeping its quality in mind.

ITC has already procured 10 tons of raw agarbattis from ORMAS and the supply is expected to go up to 50 tons in the next four months.

ITC, which recorded a turnover of Rs 40 crore in agarabatti business in 2008-09 achieving a 40% growth in comparison to the previous year, expects 50% growth in this fiscal.

“The response to our Mangaldeep brand has been good since it is a lifestyle and ambience-creating product. We are quite optimistic our trade volume will increase this fiscal,” CEO Mr Rajasekharan said.

The income generation of the rural producers will be more if the State Government withdraws 4% value added tax (VAT) on the sale of agarbatti manufactured by women SHGs on the lines of other states like West Bengal, Assam, Uttar Pradesh, Punjab, Haryana, Delhi, Madhya Pradesh and Jharkhand, Mr Rajasekharan said. The CEO also met the state finance secretary, Mr J K Mohapatra in this regard.

Click here to know more about the Agarbattis Business