South America Tobacco Group enters India
India is the second largest producer of tobacco after Brazil and 22 per cent of the tobacco produced is consumed by Cigarettes. ...
Mumbai: The cigarette smoking community in India has a new brand to puff away to glory, coming from the tobacco rich South American Continent. The Sough American Tobacco Group (SATG) has come to stay for a long haul in India and has recently introduced its king size brands V8 in three centres in Gujarat. India is the second largest producer of tobacco after Brazil and 22 per cent of the tobacco produced is consumed by Cigarettes. Nearly 87 per cent of the revenue generated on Tobacco comes from Cigarettes. The cigarette industry is approximately 105 billion in the country with 71 per cent consumed in urban areas. Out of this, the King Size Cigarette segment was approximately seven per cent (7.2 billion). ''We are primarily looking at this segment'' SATG Managing Director Amit Pujara told UNI stating that the company, which had recently moved into Australia and New Zealand besides some Asia Pacific countries, aimed to invest $20 million in the first year. It would take up contract manufacturing with a company in Andhra Pradesh initially and subsequently look for a joint manufacturing plan as the size grows. Pujara said ''Our entry into India will be primarily focused on western India and gradually spread across the major urban towns.'' He said the initial trends were encouraging. He said the Filter King segment was growing at a rapid pace due to the fast change in the lifestyle of the Urban Indian. ''We feel that offering a good Blend with convenient pricing and innovative approach can make the difference''. He said three major cigarette companies namely BAT, PMI and JTI have ventured into India either with local tie ups or independently. All these companies have seen the potential and were here to stay. SATG is the fourth such Multinational Company to enter Indian soil and '' we are sure to be competitive in the market place'' he added. He said the Government laws on anti smoking had been enforced since 2003-04 but it is to be noted that the industry has not shown any reverse trend, in fact the Industry has grown significantly from 2004-05 till date. He said SATG had its registered office in Argentina and Head Office in Switzerland. It had local factories in Brazil, Argentina, Uruguay, Peru, Chile and Paraguay. He said the company aimed to be the fastest growing tobacco company in India with a successful business model that could penetrate competitors distribution network. The focus is to get a market size of three per cent offering a right brand of portfolio mix, price positioning and channel mix.