AGARBATTI BUSINESS

Sustainable Livelihood & Community Development

Hyderabad, December2010

Sustainability Challenges

33 %

Rest
India

India is home to 33 % of global poor

Mostly resident in Rural India

Under $ 1.00

Under $ 1.25

Under $ 2.00

267

456

828

( 24 % )

( 42 % )

( 76 % )

Population Figs in Millions, Source : World Bank

ITC - Corporate Social

Responsibility
ITC believes that an effective growth strategy for
our nation must address the needs of rural India,
home to 75% of our people

ITC Country Before Corporation

Livelihood to over 5 Mn people
Globally recognised e-Choupal initiative.

Choupal Saagar -Rural hypermarts

Social and farm forestry ->100,000 hectares
Carbon,Water and Waste recycling Positive
Sustainable Community Development.
4

Publications

ITCs Sustainability Report

ITCs 7th Sustainability Report
is under publication as per
the G3 Guidelines of Global
Reporting Application Level A+
-- the highest level

ITCs e-Choupal Solution

Customised Extension Services

Weather Information
Price Discovery

Market Access at Farm Gate

Connectivity through Lead Farmer
6500 e-Choupals cover around 40,000 villages benefiting 4 million
farmers

ITC Businesses

FMCG

Hotels

Paper &
Packaging

Agri
Business

Information
Technology

FMCG Incense Sticks & Safety Matches

Agarbatti Industry Overview

Hand crafted by cottage industries and NGOs in India

India Market Size- T/O of Rs 2400 cr 70 Bn sticks

Bamboo 35,000 mts/annum
Rawbatti 60,000 mts/annum

Growing at 10% p.a

Exports- Rs 275 cr
Use of Incense

India Worship
Overseas - Ambience creation
- Aroma Therapy
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Agarbatti Industry
Highly Fragmented Industry

MARKET
Highly Fragmented
200 players with
400 brands
Industry dominated
by Local Players
Top five players
account for 20%
value

PRODUCTS
Top five pack /
price combinations
account for only
25% of the industry
Large number of
fragrances are
marketed

About ITCs Agarbatti Business

Mangaldeep was launched in 2004 and currently is the No. 2

National brand in the country

Mangaldeep has an All India market share (value) of 6 % of

with monthly sales of over 350 Mn sticks

Mangaldeep has 25 SKUs at 10 price points

The business provides livelihood to over 9000 people

The business partners with 15 small and medium enterprises

to bring out the best of their entrepreneurial skills and facilitate
in raising their process and quality standards

Delivering on Triple Bottom Line

Economic
Mangaldeep-No 2 Brand
Impressive Growth
Depth in Distribution
Brand Building

Environmental
Livelihood for > 9000 people
Exemption- Excise Duty & VAT
6/15- ISO-9000 certified Vendors

Social
Training programs
Munger, Agartala, TN, Karnataka, AP

MOU with Ministry of Govt of

Orissa,Tripura etc

Case Study:
ITC Limited and the
Agarbatti Industry
12

 IFAT-International Fair Trade Association, Head quartered in

Netherlands
Network of organisations that work to improve the livelihoods and
well-being of disadvantaged producers
Members-Producers, co-operatives or associations, exporters,
importers, retailers

Cottage Industries-Pondicherry-Recieved membership

approval
Great Advantage for Exports to US and Europe
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ITC Incense Business Value Chain

Bamboo
Charcoal

Jiggat

Raw Batti
rolling

NGOs

Perfuming
SSIs
Packaging

Marketing &
Distribution

ITC Ltd
14

IT Enabled Quality Statistics

13
Vendor
locations

13
Vendor
locations

Data By E Mail to centralized location

1.
2.
3.
4.

Process control data

Absorption of Fragrance
Physical attributes data
Finished goods clearance data

Feedback report to the vendor

1.
2.
3.
4.

Data Analysis

Process Capability
Likely defects above and below specs
Six Sigma metrics for all parameters combined
Warning messages & Corrective actions
15

Marketing Approach

Developing brand preference

1.

Superior fragrance experience (Conforms to IFRA norms)

Consistently superior product experience
Inputs for Priority Markets
Attractive & differentiated packaging Fragrance locked
Product Quality rating Systems
Brand Health Tracker
A superior fragrance development and selection procedure

Leveraging existing Nation wide distribution of ITC

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Blessings
From

17

ITCs Strengths
Nation-wide distribution2 million
outlets
Chandigarh

Brand building- Indias two largest

New Delhi

brands
Kolkata

Agartala

Supply chain management and training

module

Hyderabad
Manufacturing
Locations

Bangalore

Pondicherry
Coimbatore

Extensive R&D for product

development.
Meeting Consumer needs through

Vendor locations

Research
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NGOs - Strengths
Understanding the social milieu in rural India
Ability to interact with rural women and win
their trust
Wide reach into Indias rural heartland
Managerial skills to implement and monitor a
commercial project
19

Synergies Combine
Brand Building
Quality are
Opportunities

"Small
Often the
Reach
NGO
ITC
Beginning of Great
Sales Enterprises."
Employment

20

Raw Incense NGO Based Supply Chain

ITC Ltd /
Vendors

Order

NGO
Supplies

Raw Material
Supply
Finished Goods Brought
Back

Women
in
Different
Villages
Spread
over and
of more
than 100
Sq. Km

21

ASHA
Assistance in Social Habilitation through Agarbatti
Start up support provided by ITC
Training to workers
Use of IT infrastructure to monitor the progress.
Prices bench marked to competition-No subsidies
Over 1500 women trained in rolling of incense sticks

Initiatives by NGOs-SEWA,AOL,ORMAS etc

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Operation Harvest
Bamboo is a integral part of the Incense Stick

Indias bamboo growing regions are segregated from the rest of the country
because of lack of infrastructure and extreme poverty

ITC is working with Forest Dept. in South India and North East in a unique
sourcing programme

ITC facilitates in training the tribals to produce bamboo sticks for incense
Helps move the tribals up the value chain
Guaranteed buyer and payments

23

MOU Signing with Govt of Orissa

Rolling of Incense sticks
across Orissa
Availablity of Bamboo
sticks
Impart training and
Facilitate procurement of
raw incense
Rural employment
opportunity to 3000
women

24

ISO-9001-2000
Agartala

25

Endorsements

26

The Context and Agenda

Identify a Product that has Mass Consumption

Develop /Involve NGOs & SHGs for manufacture.

Seek assistance from Govt/Agencies
Provide inputs to produce Quality Goods
Scaling up Plans to be defined clearly
Tie up with a corporate for Marketing/Distribution
Review Progress periodically

Transforming Lives and Landscapes Ensuring a Sustainable Future

Thank you !