Group 7B

75 % - cheap quality Religious and social functions

Significant foreign exchange earner
Unskilled women and children
AGARBATTI AS A PRODUCT
1994
800 crore
Export
200 crore
Domestic
1000
crore
1800
crore
2009
Unorganised sector and highly fragmented
Manufacturing Units
800
Registered
3000
Unregistered
400 Exporters
THE MARKET
0
5
10
15
20
25
Rs. In
billions
Export Values
2005-
06
2006-
07
2007-
08
2056
2924
3509
Export in million tons
Rs 7.1 billion
18 %
35%
17% 30%

25% to 80% raw material and 8 to 10% finished
goods

Tax at different level for different states

De licensing SMEs

Agarbatti being declared as a Handicraft product
which provides incentive as per the duty draw
back rates
90% of workforce - women
20 % - organized sector
(factory based )

80 % - unorganized
( home based )
Child labour
2%
Raw Bamboo
8%
Masala /Non-Scented Agarbatti
30%
Perfumes
30%
Packaging Material
20%
Marketing
10%
Miscellaneous
10%
60%
30%
% of total cost
Masala
Non-masala
Packaging & Marketing
COST STRUCTURE
Low involvement
product

No brand loyalty

Purchases based
on packaging and
fragrance
Low involvement product
No brand loyalty
Purchases based on packaging
and fragrance
Lower income group
(< USD 700) 67%
Rural
61%
Urban
39%
Highest income group
(>USD 1570) 3%
Import duty taxes on
raw materials
(25% to 90%)
Raw material supply
issues
Lack of R&D
support
State-wise wages and
labor laws
Lack of Mktg & Advtg
Distributor Mark up of
50-60% Entry of MNCs
Bank loans not
readily available for
small scale industry
Highly fragmented sector with 450 players


NR Groups CYCLE Brand
Launched in 1948
Market leader in India with
Current market share 8%
Exports to 40 countries

First to offer 3-1 aggarbatti / premium aggarbatti
Exclusive showroom in Mumbai
Fragrance world
Aggressive marketing campaign
New brand LIA




ITC the second largest player

ITC signed a MoU with Orissa and
Tripura govt. for sourcing raw materials

Establishing Perfume and Packaging
centre for Mangaldeep brand

This tie up would provide employment
for 10000 women

Market Share of almost 5%


CURRENT
MARKET
STRATEGY

Product segments







Favorable natural incense
market
Recent tie ups with Sify
Events sponsorship in
Andhra
Spriha (Rs.20-25)
Nivedan (Rs.10-20)
Ashageet (Rs. 7.5/20
sticks
COMMUNITY PARTICIPATION
PROGRAM
Started in 2004100% growth; annual turnover
300mn
Tie up s with NGO
Quality checks and improvement
Leverages it core strengths
EXPORT STRATEGIES

Tie up with Exim Bank for overseas
promotions
Position as lifestyle product in West
Supply high quality to mega retailers
LOC ties with Mega Singapore outlet

4%
7%
4%
15%
3.5%
Andhra Pradesh Community Forest Management
Rejuvenation of bamboo forests- 27,837 ha ( 110% of
projected target)
Bamboo Resource
Management
CFC have tie-ups with ITC (Chennai) Sankranthi,
Ambika, Mustan and Jaya agarbatti industries.
The transportation costs are borne by the company.
Market Linkages
Recyclable raw material
Revenue generation by selling to paper mills
Waste
Management
Effective Quality check
Accurate payment according to bundle weight
Supply Chain
Management