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ITC plans to enter perfumed candles segment 17 Mar 2009

The Hindu

Having tasted success with its entry into the agarbatti (incense stick) market, in which it now occupies the second position, FMCG major ITC is planning to make a foray into new areas such as the perfumed candles segment.

It had already made a small beginning and test-marketing is now being done. “The response has been good, since it is a lifestyle and ambience-creating product,” a source said. The product, which involves using fancy perfumes on conventional paraffin wax candles, can burn for nearly 50 hours. Perfumed candles have ready markets in the U.S. and Europe, sources said. However, even as such exercises go on, agarbatti continued to be a focus area, sources said.

When contacted by The Hindu, V. Rajasekharan CEO, ITC agarbatti business, said that perfumed candles were not the company’s focus area now. “Rather the emphasis is on agarbattis”. He said the company was now selling between 230 million and 250 million sticks a month and many of ITC’s partners in this business have also received ISO certification.

Mr. Rajasekharan said with a five per cent share of the organised market, ITC’s Mangaldeep brand was now in the second slot (in the organised market) just after the Cycle brand. The biggest markets for incense sticks were Hyderabad, Tamil Nadu and West Bengal and also the North Indian States. Perfumes used on the products conform to the norms of the International Fragrance Research Association.

He said recently the company had entered into an arrangement with the Tirumala Tirupati Devasthanam (TTD) for supplying Mangaldeep agarbatti to be sold to devotees as part of their offering to Lord Balaji. A similar arrangement has been entered into for making offerings at the Vaishno Devi Temple too. Around seven million sticks had already been supplied to the two temple authorities so far and the company was exploring similar options with other temple authorities, Mr. Rajasekharan said.

ITC started to market agarbattis (incense sticks)in 2004. Its business model which creates livelihood for nearly 5,000 women directly (and many more indirectly) involves small firms, NGOs and women self-help groups. It buys the product from small firms which buy the raw agarbattis from women who have been organised into self-help groups facilitated by ITC. The entire process follows quality norms laid down by ITC, he said.

Bamboo sticks, one of the crucial raw material for agarbatti-making, is available in Andhra Pradesh, Kerala, Karnataka and the North East. At the behest of the government of Tripura, a State which abounds in good quality bamboo, ITC set up a unit in Agartala in partnership with a local company. It has also entered into programmes for the development of bamboo stick for making agarbattis with other States.

© ITC Limited