8/2/2019 ITC SCM Finalll Rev

1/14

Click to edit Master subtitle style

4/1/12

Group Membersndro Saha - 81Wani 92h Ghanavat 100s Koli 119

hwanathan Hariharan - 128

Supply Chain

Management of ITCLtd. Cigarettes

11

8/2/2019 ITC SCM Finalll Rev

2/14

4/1/12

Market capitalisation : US $ 33billion and a turnover of US $ 7billion.

Rated among the World's Best BigCompanies, Asia's 'Fab 50' and theWorld's Most Reputable Companies

by Forbes magazine, Diversified presence in Cigarettes,

Hotels, Paperboards & Specialty

Papers, Packaging, Agri-Business,

8/2/2019 ITC SCM Finalll Rev

3/14

4/1/12

India the second largest producer of tobacco in

the world after China.

The Indian cigarette industry forms 32 % value ofthe Rs.72000 Crores.

Cigarettes account for 85 per cent of the countrystotal tobacco exports.

Of the total tobacco produced in the country,around 48 per cent is consumed in the form of

chewing tobacco, 38 per cent as bidis, and 14 percent as cigarettes.

*Business Standard June 02,2011

8/2/2019 ITC SCM Finalll Rev

4/14

4/1/12

The per capita consumption of cigarettesin India is a tenth of the world average.

In the recent past, the consumption oftobacco has been reduced by anti-tobaccodrives and the ban of consumption inpublic areas.

The biggest player in this industry is ITC

with a market share of 73 per cent

8/2/2019 ITC SCM Finalll Rev

5/14

4/1/12

20% of bidis are produced in the organized sectorand 80% in the unorganized sector.

It is estimated that 750 billion to 1.2 trillion sticksare produced annually.

The bidi industry in India is worth Rs200 billion($4bn)

Bidis are much cheaper than cigarettes

Bidis cost between Rs2.50-5.00 for 25 sticks (lessthan one Rs per stick)

In 2009, Euromonitor reported that bidi volumesales were down 5% from the previous year

because of a ban on smoking in public places.

8/2/2019 ITC SCM Finalll Rev

6/14

4/1/12

Declines in cigarette volumes aremainly due to a 2008 increase in thetax on unfiltered cigarettes.

The tax increase has led to manyunfiltered brands being removed

ITC Ltd stopped unfiltered cigaretteproduction entirely

Despite declines in sales, it is

expected that cigarette use willincrease - dis osable incomes66

8/2/2019 ITC SCM Finalll Rev

7/14

4/1/12

Indias total cigarette production isvalued at Rs 220 billion (12%-exported)

According to EuromonitorInternational database, the retailvolume sales of cigarettes have been

stagnated for three-four year ataround 90 billion level.

Retail level of the sales have been

decreased by 9% from 99.6 billion77

8/2/2019 ITC SCM Finalll Rev

8/14

4/1/12

CigaretteIndustryOverview

Main players inthis industry areas follows:

ITC, GodfreyPhillips, VST,GTC theirmarket shares

are:

88

8/2/2019 ITC SCM Finalll Rev

9/14

4/1/12

PRICINGSTRATEGIES

8/2/2019 ITC SCM Finalll Rev

10/14

4/1/12

Retailer prices for ITCCigarettes

1010

8/2/2019 ITC SCM Finalll Rev

11/14

4/1/12 1111

DistributorPricing

8/2/2019 ITC SCM Finalll Rev

12/14

4/1/12

Gold Flake -

Kings

Gold Flake - Honey

Dew

8/2/2019 ITC SCM Finalll Rev

13/14

4/1/12 1313

RetailPricing

8/2/2019 ITC SCM Finalll Rev

14/14

4/1/12

Retail Pricing

1414

0

2

4

6

8

10

12

Gold Flake - Honey Dew

0

2

4

6

8

10

12

Gold Flake - Kings