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ITC agarbattis to find new markets through ‘Fair Trade’
The Hindu Business Line - 17 Aug 2007

ITC Ltd is all set to make a fresh breakthrough in agarbatti exports through IFAT (International Fair Trade Organisation) certification for one of its major vendors.

Cottage Industries, producing the Mangaldeep brand of incense sticks for ITC, has recently been accredited with IFAT certification, which is an internationally recognised benchmark for fair trade practices.

Producer-friendly body

Mr V.M. Rajashekharan, CEO of the ITC Agarbatti Division, told Business Line that IFAT is a Netherlands-based network of organisations that work to improve the livelihoods and well-being of disadvantaged producers. Its membership co nsists of producers, cooperatives or associations, exporters, importers, retailers and even financiers that follow the principles of fair trade.

He said IFAT members can use the FTO mark as a logo on their products, and most wholesalers-distributors abroad today look for suppliers who are recognised Fair Trade units.

The major benefit for the Indian product, according to him, is that consumers in Europe and the US who recognise the Fair Trade Movement worldwide, prefer to buy a product originating from a Fair Trade unit instead of from a mass-production unit.

ITC, which commenced marketing of Mangaldeep incense sticks three years ago, sources from nine small-scale/cottage vendors across the country, some six of whom have received the ISO 9001-2000 certification. The SBU (strategic business unit) now sources 180-200 million sticks per month.

Mr Rajasekharan said raw incense (unperfumed) is a key raw material for the process.

CSR initiative

He said the SBU collaborates with various NGOs in Bihar, Karnataka, Puducherry and Tamil Nadu to provide vocational opportunities to rural youth and economically disadvantaged women as part of ITC’s fresh CSR (corporate social responsibility) initiatives.

Organised agarbatti business now commands a consumer spend of around Rs 1,200 crore annually (No BIS exist for this category).

Besides an MoU with Khadi and Village Industries Commission for manufacture of Mangaldeep agarbattis, ITC has also signed up with Exim Bank for export marketing services to leverage the bank’s overseas presence. Mangaldeep brand is now available in Singapore, Malaysia, Nepal, the UAE, Bahrain, South Africa and the US.