Godfrey Phillips plans to make cigars in two years

Tobacco major Godfrey Phillips, which manufactures some of the popular brands of cigarettes in the country, is likely to start manufacturing cigars in a couple of years.

"It will make sense to manufacture cigars once we have a significant volume of sales," Amrish Anand, chief executive officer of Godfrey Phillips International (GPI), said.

Going by the current growth rate of cigar consumption in the country, he expects the volume of sales will be significant enough in a couple of years to start manufacturing them in India.

Over the past one year, Anand said, cigar sales in India had increased by 44 per cent. Last year, 2.5 million cigars of various brands were sold in the country. In the current year, 8 million cigars, valued at about Rs 25 crore, were expected to be sold. The value of sales was expected to touch Rs 100 crore in the next five years. At present, GPI has a share of 65 per cent in the country's cigars market.

The company has formally launched the sales of cigars produced by Villiger Sons (VSL) of Switzerland. GPI started selling cigars in India four years ago following its tie-up with US-based Altadis, the world's largest

cigar company, in December 2002. With growing income levels in India, VSL owner Heinrich Villiger envisages a rapid increase in consumption of cigars in the country. "We are convinced that India is going to become the largest market for Villiger in Asia," he said adding that China today accounted for maximum sale of his company's cigars in the continent.

Villiger said his company was currently focusing on the Asian markets as their traditional markets in Europe were saturated.

The price of cigars being sold by GPI in the country are in the range of Rs 5 to Rs 1,450 a piece. The company was targeting the upper middle class and the rich, Anand said.