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Regarding incense stick industry

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    AGARBATTI BUSINESS

    Sustainable Livelihood & Community Development

    Bengaluru, December 2011

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    2

    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

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    3

    ITCCountry Before Corporation

    Livelihood to over 5 Mn people

    Globally recognised e-Choupal initiative

    Choupal Saagar -Rural hypermarts

    Social and farm forestry ->1,19,000 hectares

    Carbon, Water and Waste recycling Positive

    Created sustainable livelihoods for 39,000 rural women

    Supplementary education provided to over 2,80,000children

    http://www.itcportal.com/itc-business/agri-business/e-choupal.aspx
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    Publications

    Reporting Application Level A+

    The highest level

    Eight CDM Projects already

    registered

    First Forestry CDM Project in India& 2nd in the world

    ITCs Sustainability Report

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    Connectivity through Lead Farmer

    6500 e-Choupals cover around 40,000 villages benefiting 4 million

    farmers

    Customised Extension Services

    Weather Information

    Price Discovery

    Market Access at Farm Gate

    ITCs e-Choupal Solution

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    ITC Businesses

    FMCG

    ,

    Paper &

    PackagingHotels

    Agri

    Business

    Information

    Technology

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    FMCG Incense Sticks & Safety Matches

    http://localhost/var/www/apps/conversion/tmp/scratch_1/MangaldeepTVC.wmv
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    8

    Agarbatti Industry Overview

    Hand crafted by cottage industries and NGOs in India

    India Market Size- T/O of Rs 3345 Cr - 105 Bn sticks

    Bamboo : 40,000 mts/annum

    Rawbatti : 70,000 mts/annum

    Growing at 15% p.a

    Exports- Rs 325 Cr

    Use of Incense

    IndiaWorship

    Overseas - Ambience creation

    - Aroma Therapy

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    Highly Fragmented Industry

    MARKET PRODUCTS

    Highly Fragmented

    200 players with

    400 brands

    Industry dominated

    by Local Players

    Top five players

    account for 50% of

    represented industry

    Top five pack /

    price combinations

    account for only

    25%of the industry

    Large number of

    fragrances are

    marketed

    Agarbatti Industry

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

    National brand in the country

    Monthly sales of over 500 Mn sticks

    Mangaldeep has 35 SKUs at various price points

    The business provides livelihood to over 10,000 people

    The business partners with 17 small and medium enterprisesto bring out the best of their entrepreneurial skills and facilitatein raising their process and quality standards

    About ITCsAgarbatti Business

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    11

    Delivering on Triple Bottom Line

    Economic

    Mangaldeep-No 2 Brand

    Impressive Growth

    Depth in Distribution

    Brand Building

    Environmental Livelihood for > 10,000 people

    Exemption- Excise Duty & VAT

    6/17- ISO-9000 certified Vendors

    Social

    Training programs Munger, Agartala, TN, Karnataka, AP

    MOU with Ministry of Govt ofOrissa,Tripura etc

    Case Study:

    ITC Limited and the

    Agarbatti Industry

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    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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    NGOs

    SSIs

    Charcoal

    Raw Batti

    rolling

    Jiggat

    Perfuming

    Packaging

    Bamboo

    Marketing &

    DistributionITC Ltd

    ITC Incense Business Value Chain

    13

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    14

    IT Enabled Quality Statistics

    17

    Vendor

    locations

    Data By E Mail to centralized location

    1. Process control data

    2. Absorption of Fragrance

    3. Physical attributes data

    4. Finished goods clearance data

    Data Analysis17

    Vendor

    locations

    Feedback report to the vendor

    1. Process Capability

    2. Likely defects above and below specs

    3. Six Sigma metrics for all parameters combined

    4. Warning messages & Corrective actions

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    Marketing Approach

    Developing brand preference

    Superior fragrance experience (Conforms to IFRA norms)

    Consistently superior product experience

    Inputs for Priority Markets Attractive & differentiated packaging

    Consumer Promos

    Brand Health Tracking & Research

    A superior fragrance development and selection procedure

    1. Leveraging existing Nation wide distribution of ITC

    15

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    Marketing Initiatives

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    Marketing Initiatives

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    Blessings

    From

    18

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    ITCs Strengths

    Nation-wide distribution

    2 million

    outlets

    Brand building- Indias two largest

    brands

    Supply chain management and training

    module

    Extensive R&D for product

    development.

    Meeting Consumer needs through

    Research

    Agartala

    Pondicherry

    Chandigarh

    CoimbatoreKrishnagiri

    Bangalore

    New Delhi

    Kolkata

    Hyderabad

    Munger

    17 Distributed Manufacturing Locations

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    20

    NGOs - Strengths

    Understanding the social milieu in rural India

    Ability to interact with rural women and win

    their trust

    Wide reach into Indiasrural heartland

    Managerial skills to implement and monitor a

    commercial project

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    21

    Synergies Combine

    ITC NGO

    Brand Building

    Quality

    Reach

    Sales

    Employment

    "Small Opportunities are Often theBeginning of Great Enterprises."

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    22

    Raw Incense NGOBased Supply Chain

    ITC Ltd /

    VendorsNGO

    Womenin

    Different

    Villages

    Spread

    over and

    of morethan 100

    Sq. Km

    Order Raw Material

    Supply

    Finished Goods Brought

    Back

    Supplies

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    Hand Rolling Process

    Agarbatti Manufacturing Process

    http://localhost/var/www/apps/conversion/tmp/scratch_1/RB%20Hand%20Rolling%20Process.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_1/RB%20Hand%20Rolling%20Process.wmv
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    24

    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 3000 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

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    MOU Signing with Govt of Orissa

    Rolling of Incense sticksacross Orissa

    Availablity of Bamboosticks

    Impart training andFacilitate procurement ofraw incense

    Rural employmentopportunity to 3000women

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    ISO-9001-2000

    Agartala

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    Endorsements

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    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

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    Transforming Lives and Landscapes Ensuring a Sustainable Future

    http://c/Documents%20and%20Settings/91160/Backup-NZ-05012010/Nazeeb%20Arif/ppt/CESD%20Lonavala/Training/91160/My%20Documents/Nazeeb%20Arif/Chairman/Zu

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