ITC plans big for N-E markets - The Telegraph
June 24, 2012
Guwahati, June 24: The Rs 36,000-crore diversified conglomerate, ITC Limited, is setting up supply centres in the Northeast to cater to local markets in the food segment.
The move comes at a time when companies are making huge investments in the region, giving a fillip to its economic development.
"The company is making significant investments and is going forward in having supply centres closer to the Northeast and in the region itself to feedstock to these markets in the foods segment," an ITC spokesperson told The Telegraph.
Supply centres offer both manufacturing as well as warehousing facilities.
"The plan to have supply centres here is because of the excellent demand for our products," the official said.
The Guwahati branch office, which is responsible for the entire region, is among the company's top performing branches in the country.
The Northeast offers a huge market for the private sector and a number of companies, given the good response, have chalked up plans for expansion.
Some companies have taken help of the attractive industrial policies of the state, while others have come on their own.
Assam industry and commerce minister Pradyut Bordoloi said 336 investment proposals valued at Rs 38,000 crore had been received by states of the region under the North East Industrial and Investment Promotion Policy. Of these, 70 per cent have borne fruit.
ITC and the Assam government are discussing the setting up of an integrated food manufacturing facility in the state to cater to the growing demand for its products in the Northeast. "It is a recent development and this is because of the excellent demand for our products," the official said.
The company has a significant presence in the region in the branded packaged foods segment and has a better than average growth rate.
ITC is one of India's foremost private sector companies and has a diversified presence in cigarettes, hotels, paperboards and others FMCG products and is rapidly gaining market share even in its nascent businesses of packaged foods and confectionery, branded apparel, personal care and stationery.
The official said the main reason for the success of the company in the region is the presence of a good on-ground supply chain and distribution infrastructure. In addition to that, the high quality of its products has led to good consumer acceptance here. "The company's differentiated products across segments delight consumers in the Northeast with their superior value proposition," he said.
In the education and stationery products sector, Classmate is the stationery brand of choice among students of the region. "Our distribution network reaches all corners of the region and the market share of Classmate notebooks in the Northeast is more than double that of our all-India market share of 15 per cent," the official said.
ITC entered the education and stationery business with its premium Paperkraft brand in 2002 and later expanded into the popular segment with its Classmate brand in 2003. By 2007, Classmate became the largest Notebook brand in the country. Together, Classmate and Paperkraft offer a range of products in the education and stationery space to the discerning consumer, providing unrivalled value in terms of products and price.
Another product of the company, Vivel soap, has become the number one brand in Assam (according to AC Nielsen March 2012 survey for the mid-popular segment) and is growing fast.
In the incense sticks sector, the company also sources from Tripura and has helped create sustainable livelihood opportunities for rural women through agarbatti rolling.
The Northeast contributes around 90 per cent of the incense sticks produced in the country, out of which Tripura alone contributes around 70 per cent.
In the cigarette sector, the official said the region's industry was challenged by extremely high taxation, which has spawned a rapidly growing illegal trade in tax-evaded cigarettes as well as contraband trade by smugglers.
