“Premium 777 Bidi”

Desi Bidi Videshi Swad

Mission and Vision:
Mission:
To prove ourselves as the
best Bidi Manufacturing
Company in India and
Abroad.
Vision:
To promote a Swadeshi
product such that
“Premium 777” is known
for Best Quality and
Lower Prices.
Why a Bidi Manufacturing
Company?

• A Swadeshi Product
• Condition of Indian Economy and the
Unorganized Bidi Sector
• Indian Manager’s perception
Indian Bidi Manufacturing
Sector:
• Types of Bidis produced in India are Toasted and Roasted
ones.
• Northern Indian smokers prefer the toasted variety while in
Eastern India Roasted Bidis are preferred
• Madhya Pradesh is the largest supplier of Tendu Leaves
but southern India has a large number of organized
producers with better working conditions for their labors
and producing better quality Bidis.
• Each state in the country has around 200 manufacturers
making the business very fragmented.
Contd. …
• All India Bidi Federation Claims to be more than 50yrs
old, represents, Bidi Industry it has had to fight allegations
regarding the use of child labor.
• The unorganized and the unbranded sector, which is
bringing the entire, Bidi sector into disrepute.
• Due to rising excise duties and legislations against public
smoking the overall share of cigarette declined whereas
Bidi continued to perform well almost 20% in volume
terms.
Market Players:
• Pataka Bidi Manufacturing Company
• The Kajah Bidi Group
• Bharath Beedi
• Mangalore Ganesh Beedi
• Kerala Dinesh Beedi Workers Cooperative

To Note: There is no bidi manufacturer with a share of more than 5%.

The market is highly fragmented, with several brands with a 1%
share each. The list of key players are indicative and by no means
exhaustive.
Industry Location: Geographic
• RAJNANDGAON, Situated
30Kms from Durg, 70Kms
from Raipur and Nagpur
315Kms (commercial hub of
Maharashtra).
• Connected by National
Highway.
• Climate favourable for the
growth of Tendu Tree.
• M.P.(Largest producer of
Tendu Leaves) is
comparatively nearby.
Industry Situation: Demographic
• The family life cycle of the city is mainly young married
& unemployed people.
• Education is average .
• Mainly Hindu families dominate there and the majority of
the families are middle lower and middle class.
• The life style of the families are vary simple and social ,
and they carry the ambitious personality.

Note: It means there is the need of employment and our

industry needs this kind of a Location.
Product Line:
• Simple Indian Bidi (Roasted)
– “Josh”
• Simple Indian Bidi (Toasted)
– “Shakti”
• Flavored Bidis (Roasted) –
“Mehek”
• Filter Bidis (Roasted)-
(Premium Product) –
“Shreshtha”
• Cigars (Futuristic product)
Pricing:
• Price penetration strategy to be used.
• Josh and Shakti @ Rs.3 per Pack of 20
• Mehek @ Rs.3.5 per Pack of 20
• Shreshtha @ Rs.4 per Pack of 20

Note:- One box contains 10 such packets and 1

master box accommodates 60 boxes i.e.
1 Master Box = 60 Boxes = 600 Packets = 12,000 Bidi.
Prospective Markets:
Geographically: Demographically:
• Rajnandgaon, Durg,
Raipur, Doongargarh, • Age: 18 and above
Bhilai etc in Chattisgarh. • Sex : Male
• Nagpur and neighboring
places in Maharashtra. • Income Level:
• Growing markets of A.P., Medium and Low
U.P, Jaharkhand and Bihar.
• Exotic markets like Russia,
Iraq, Canada and Germany
Promotional Techniques:

• Sponsorships to local cultural and sport events.

• Sponsoring constructions of Family Parks.
• Public announcements and publicity on
Rickshaws.
• Free filters with Josh and Shakti.
• Posters at the points of sales.
• Internet for Exotic Markets.
Packaging:

Josh, Shakti and Shreshtha

Mehek
Positioning:
• Positioned to the Indian consumer as the Quality
product at cheap price ( More for Less)
• Positioned to the exotic customers as a Premium
product at competitive prices and best quality
product.
• Positioned as a Bidi, which has the minimum
burning smell from the mouth after consumption
and good to taste in comparison with the other
brands.
 Channels of Distribution:
Bidi
Tendu leafs and
Tobacco farmer
collector
Traders & agents
Auctioneer

Purchase of tobacco and mixing

Manufacturing
Wholesalers
Commission Agents
Retailers
Around 1 million pan shops, grocery shop
 Competitive Advantages:
• Unique taste than the other brands.
• Provision of filter with the packs of Josh, Shakti and
Mehek brands.
• Best quality provided at reasonable Price.
• Available in various flavors.
• Concept of filter Bidis, which is new in India and can be
traded upon.
• Avoid the burning smell from the mouth of the consumer.
• Provide better consumer satisfaction than the other
products in the market.
Production and Technology:
Procedure for manufacturing:
• Raw Materials to be stored at the storehouse located
inside the campus.
• From there it would be distributed to the villagers for
rolling purposes.
• Initial screening would be done.
• The bad quality ones would be rejected.
• Then they would be segregated in the different
departments such as the “Flavour Sangh”, “Simple Bidi
Sangh”, “Filter Bidi Sangh”.
Contd. …
• At the flavour sangh, flavour tipping would be done. At
all these sanghs quality check would be performed and
the bad quality ones would be screened out again.
• At all these Sanghs Roasting and sun drying for the
Bidis would be done.
• Then they will move collectively to the Packaging
Sangh where they would be packed according to the
varieties and a final quality check would be performed.
• After packaging they would move to the warehouse for
final storage and sales purposes.
Quality Check:
• The Physical quality check would be performed at
the first and the last stages by verifying that the
Bidis are properly made and packaged by the line
staff person.
• The Random taste check would be performed and
the subsequent action would be taken on the lot
depending on the Lower control Limit (LCL) and
Upper Control Limit (UCL).
Expected Production:
• 3,000 Bidis by a roller everyday or 9,000 Master Boxes
annually by 100 rollers.
9,000 Master Boxes
 
 

60% Domestic 40% Exports

5,400 Master Boxes 3,600 Master Boxes
@ Rs3/ packet or Rs 1800/MB @0.08$/Packet- $48
@ Rs.3.5/ Packet- Rs.2,100/MB
@ Rs4 /Packet- Rs. 2,400/MB
Human Resource Planning:
• Packaging(8)

• Manager(3)

• Line staff (8)

• Quality Control Inspector(4)

• Rollers(100)
Human Resource Development:
Emphasis on the relationship with the employees
• Creation of a social club.
• Introducing 5 scholarships every year to the meritorious
students of the staffs including rollers.
• Bonus will be given as per companies profit.
• Medical checkup will be free in every four months to each
employee.
• No employment to individuals below 18 years.
Legal Bindings:
1. Apply to the Directorate of the Industries depending upon
the location of the unit i.e. Rajnandgaon for a provisional
Bidi Unit registration in the form prescribed by the
development commissioner New-Delhi.
2. We have to get clearance from the specified industry
through the directorate Of Industries and then approach for
the provisional SSI registration unit.
3. After the clearance the Industry Center will forward the
complete set of applications received from us to the
Rajnandgaon Municipality.
4. After Getting the permission we would be able to establish
our Bidi Manufacturing Unit.
Clauses required:
• No Objection Certificate (NOC) on pollution angle from the
department of technology and Environment.
• Approval of factory building and machinery layout from the inspector
of factories.
• Site clearance from the town and the country planning department
• Permission for land use, conversion and ground water clearance from
agricultural department.
• Power feasibility certificate from the electricity department.
• Clearance from health and revenue Department.
• License from Food Administration for the canteen in the premises.
• License from the civil supplies department
Expected Cost Sheet:
Particulars Amount
Rolling Staff (100*32*360*3) 34,56,000
Packaging Personnel (8*4500*12) 4,32,000
Quality Manager (4*7500*12) 3,60,000
Manager (2*18000*12) 4,32,000
Office Boy (2*2500*12) 60,000
Staff Salary (6*10000*12) 7,20,000
Depreciation of Office Equipment
(10% of 1,50,000) 15,000
Contd. …

Depreciation of Packaging Equipment

(15,600*3) 46,800
Power and Lighting 2,40,000
Depreciation of Land and Building
(15,00,000 @ 5%) 75,000
Water (5,000*12) 60,000
Commission, Duties and
Taxes and Transport (Exports) 20,00,000
Commission, and Taxes (Domestic) 10,00,000
Contd. …

Tobacco Cost and other

Raw materials (including Tendu leaves) 50,00,000
Transport Domestic (10% on S.P.) 19,26,390
Repairs and Maintaianence 2,40,000
Post and Telegraph 2,40,000
Advertisement 12,00,000
Interest on Loan (12.5% on 25,00,000) 3,12,500
Total 1,78,15,690
Valuation of Assets and Working
Capital:

Particulars Amount
Land and Building 15,00,000
Machinery (78,000*3) 2,34,000
Office equipment and Furniture 1,50,000
Vehicles (2,00,000*2) 4,00,000
Note: Working Capital to be maintained for Rs.30,00,000 to
meet out the daily current liabilities and maintain smooth
daily operations.
Expected Sales Figures:
• Domestic Sales: Total sales 5,600 Master Boxes =
Rs.1,19,19,900 ….(1)
(@ Rs.1,800/ MB for 1600 MBs = Rs.28,80,000)
(@ Rs. 2,100/Mb for 1867 MBs = Rs.39,20,700)
( @ Rs. 2,400/MB for 2133 MBs = Rs.51,19,200
• Exports: Total sales 3,400 Master Boxes (@ $48/MB) = $
1,63,200 or Rs. 73,44,000 ….(2)
 
• Total Sales Figures (1+2) = 1,92,63,900
Profit: 1,92,63,900 – 1,78,15,690 = Rs.14, 48,210/ Annum
Sources of Initial Investment:

• Loan from Small Industries development

Bank of India (SIDBI) 25,00,000
• Contribution of Partners 30,00,000
Future Expansion and Growth
Depends on:
 THREATS OF
SUBSTITUTE
PRODUCT
CIGARETTE
CIGAR
HUKKAS

POWER OF RIVALRY AMONG

POWER OF BUYERS
SUPPLIERS COMPETING SELLERS IN THE
INDUSTRY 1. TASTE OF THE BIDI
1. IF THE IS DISLIKED
1. EXISTING CIGARETTE
SUPPLIERS STOP MARKET. 2. NEW CONCEPT HIT
TO SUPPLY US 2. LOCAL POPULAR EXISTING THE BIDI MARKET
RAW, MATERIAL BRAND IN BIDI LIKE MEGHNA, 3. CHEAP PRICED HIT
2. 501 PATAKHA
THE BUYERS
LATE SUPPLY
3. BAD
QUALITY

4. HIGHER PRICE
POTENTIAL NEW
ENTRANTS
NEW BIDI COMPANY
CAN EMERGE
GOVERNMENT CAN
ENCOURAGE THE
BIDI MAKERS.
Risks Involved:
• Environmental Factors

• Strikes

• Fire

• Government rules and regulation

• Social factor
“To Err is Human and to forgive
is Devine”

Sayonara

Gautam & Abhishek