ITC smells big opportunity in agarbatti business

CHENNAI: ITC’s agarbatti brand Mangaldeep plans to take its market share to 13 per cent by FY19 up from 10 per cent now. “We are growing close to 30 per cent year-on-year and will maintain the momentum. The agarbatti segment has been profitable for us,” said  V M Rajasekharan, CEO, ITC Matches and Agarbatti  Division. The company’s stronghold markets include Tamil Nadu, Andhra Pradesh, West Bengal and north-eastern states.

While the Rs 6,000-crore agarbatti market is fragmented, the five-decade-old Mysore-based Cycle brand which produces one billion sticks a month is clearly the leader.

On competition from China and Vietnam, Rajasekharan said incense sticks are made with bamboo, a key input sourced from China or Vietnam. This is because forest regulations on transportation are making the raw material meagre in the country, forcing manufacturers to turn to imports. “We also do not have that specific bamboo species in the north-east. But, at the same time, we are taking measures to indigenise the product; in the next couple of years we will be successful in utilising the huge bamboo resources in the country,” he added.

According to him, around 40,000 workers are involved in the value chain of Mangaldeep. “Our association with small enterprises is a classic example of synergy between SMEs and large corporate entities.” Meanwhile, it also leverages the core strengths of ITC in nation-wide distribution and marketing, brand-building, supply chain management, manufacture of high quality paperboards and creating innovative packaging solutions to offer Indian consumers high quality agarbattis.

To popularise the brand, ITC has also rolled out a devotional mobile app. ITC also looks into delivering regionally relevant offerings to further customise the portfolio in line with local consumer preferences.