Agarbatti (incense sticks) makers are increasingly sourcing their bamboo requirements - a key raw material – from Vietnam, due to law and order problems in the North Eastern states, home to bamboo in India.
The president of the All India Agarbathi Manufacturers' Association (AIAMA), Sapthagiri S Boggaram said, “Yes, getting bamboo is a problem over the years, because tribals in North Eastern states are not able to cut and slit bamboo because of insurgency and related problems.”
He added, “Earlier, 1o per cent of our bamboo requirements used to come from Vietnam, but over the past three to four years, it has gone up to 50 per cent.”
He said that there was no impact from a cost perspective, as the landed cost of imported bamboo is almost the same as domestic product.
To overcome the problem partially, the industry, comprising 1,200 manufacturing units across India, 60 per cent of which are in Karnataka, is looking at captive bamboo cultivation in Karnataka.
“We are trying to convince the state government to allow us to grow certain species of bamboo in private land.” This, he said, would also result in reduced costs, as 40 per cent of domestic bamboo price that lands in Karnataka from the North East, mainly Assam, is freight cost.
Boggaram said that the Rs 1,800 crore incense stick industry is growing at about 15 per cent annually, but rising input costs are squeezing profit margins.
The industry employs 2 lakh workers, mostly women, who handroll incense sticks at home, Boggaram said.
NR Group for expansion
The home fragrance arm of Mysore-based incense stick maker NR Group is set to open its third company-owned store in Bangalore shortly and mulling similar foray in New Delhi, apart from appointing franchises across India, given the industry's steady growth.
The managing director of Ripple Fragrances, Kiran V Ranga said, “The home fragrance market, comprising functional and wellness segments, is about Rs 170 crore currently and growing at about 35 to 40 per cent annually. To take advantage of it, we are opening our third store in Bangalore, and planning to open stores in other metro cities also.”
The company also retails its products from 700 home decor outlets in India.
The group's turnover was about Rs 750 crore last fiscal.