Godfrey Phillips, the Rs 1,800-crore tobacco company with interests in beverages and confectionery products, is investing over Rs 200 crore to set up a plant in Maharashtra's Thane to make cigarettes. The plant is expected to be operational by December next year with a capacity to make 900 million sticks per month.
Currently, the company has two plants, one in Mumbai and another in Ghaziabad, Uttar Pradesh. “We are expanding our distribution reach for tobacco. Currently, we are present in over 8 lakh outlets in North and West, which are the markets where our sales are strong. We are foraying into the West Bengal market with additional 15,000 retail presence,” Bhisham Wadhera, executive vice-president (sales), Godfrey Phillips, told Business Standard. Godfrey will set up close to 900 ‘Four Square’ branded outlets in West Bengal over the next one month.
Godfrey Phillips is also looking at launching new flavours under its mint brand ‘Fundamint’ in the next two weeks. At present, Fundamint is available in two flavours, Saunf Fresh and Double Thanda.
Fundamint should clock a sales turnover of close to Rs 20 crore by the end of this financial year on the back of extensive retail presence, new advertising and marketing campaigns as well as new flavour launches, according to Wadhera.
The company is also looking at a national rollout of its tea brands such as Tea City, Symphony and Super Cup in order to boost sales.
“We have just changed the look of our tea brands to give them a more refreshing look. The tea business should clock a turnover of Rs 100 crore by March 2009,” Wadhera said. While tea is packaged at plants in Uttaranchal and Kolkata and sells 400 tonnes a month, mint is manufactured at Bhopal and sells 100 tonnes a month. The total confectionery market is estimated at Rs 1,500 crore, where mint segment is around Rs 300 crore.
The company is also planning to manufacture cigars in India by next year at one of its existing plants. Currently it imports cigars, sold here between Rs 9 and Rs 2,000 a cigar.
More From This Section
Godfrey also foresees almost 40 per cent growth in exports, thanks to a global shortfall, which forced overseas buyers to source Indian leaf at a higher price. The company exports raw, finished and manufactured tobacco to over 20 countries.
The country’s tobacco exports jumped 55 per cent to $169 million (Rs 708 crore) in the first quarter of 2008-09. India’s 2008-09 exports could touch a record $600 million, up 19 per cent from $503 million a year ago, according to the Tobacco Board.
India is the second biggest producer of tobacco after China and the fourth biggest exporter of unmanufactured tobacco. British American Tobacco, Japan Tobacco, Philip Morris International, and Imperial Tobacco Group, are the main buyers of the Indian leaf. Overseas buyers are paying 50-70 per cent more compared with last year and that was reflecting in export turnover figures. ITC, Godfrey Phillips India and Vazir Sultan Tobacco are leading buyers in the domestic market.