Agarbatti consumption increases by 30% to 40% during festival period: Ankit Agrawal, Director & Managing Partner, Zed Black  

Covid impact on the agarbatti business has been positive, except for the disruption in the supply chain.

India is the biggest exporter of incense sticks with exports to 150+ countries, like the US, the UK, Malaysia, and Nigeria being the top markets. Even as Covid-19 severely hampered businesses worldwide in 2020, India’s incense stick (agarbatti) industry faced little demand contraction, with industry exports expected to grow 15 percent by this year-end. Agarbatti consumption increases by about 40-50 percent during the festive season, as this is the time when the nation celebrates and prays together. MP based, Mysore Deep Perfumery House(MDPH) with its flagship brand Zed Black 3-in-1 is amongst the key players in the organized agarbatti sector. During the pandemic, MPDH saw exports at 109%, more than double the exports of the financial year 2019-20.

MDPH has extended its arm in the Indian household with two A-lister celebrities MS Dhoni & Hrithik Roshan for established brands. MDPH and its flagship brand Zed Black claim to process over three crore incense sticks, selling 15 lakh packs every day. The brand claims to be one of the top 3 agarbatti manufacturers in the country. The company has set a global footprint with exports to 40+countries like the USA, Brazil, Ethiopia, Netherlands, Australia, Malaysia, etc.

In an exclusive conversation with the Financial Express Online, Ankit Agrawal, Director & Managing Partner, Zed Black talked about the current situation and trends of the industry and personal growth of the brand MysoreDeep Perfumery House (MDPH). Excerpts:

How effective has the GOI’s move of indigenous manufacturing of agarbatti in the country been?

The Government has been very expressive with regards to Aatmanirbhar Bharat where the morale ofIndian manufacturers has been boosted. Steadily the government has also taken steps in terms of import restrictions and on ground activities which has created an even playing field of the manufacturers to make the products and to sell the products both domestically and internationally.

In Union Budget 2021, the government earmarked Rs 15,700 crore for the development of this sector? Your thoughts on the same.

The favourable steps taken by the government like allocation of funds, and creating suitable conditions for Indian manufacturers to prosper, is a positive outlook shown by the government.

How do you foresee the move of stopping imports of agarwood used in agarbatti completely?

I am not really aware about the total stoppage of imports of agarwood to India, it has always been in India. However the import of raw agarbatti has been totally stopped since 2019, and not even a kilo of raw agarbatti has been imported and everything has been made indigenously which turned out to be a good step from the government for the agarbatti industry.

Ankit Agrawal, Director MDPH and Anshul Director MDPH in front of their manufacturing facility in Indore Madhya Pradesh

How has imposition of import restrictions on agarbatti helped in promoting domestic manufacturing? Will the government’s relief measures help the industry?

With the restrictions in imports, a whole 15,000 metric tonnes of raw agarbatti is being made in the country, which has created numerous jobs in the industry. With no imports and increased raw agarbatti production, we have actually become Aatmanirbhar in agarbatti manufacturing.

How much has the agarbatti industry suffered during the lockdown?

During the first lockdown, the agarbatti industry was totally shut, once the markets were opened there was a surge in demand for Agarbattis. Even now the demand has been sustained, as many of them are working from home, the consumption of agarbatti increased due to religious beliefs, faith in God as the whole families used to pray together.

Covid impact on the agarbatti business has been positive, except for the disruption in the supply chain due to worldwide shortage of containers, transportation, lockdown in Vietnam has impacted the raw material supply, the demand is not an issue, but the raw material supply is an issue.

Workers making Gauved Cow Dung Sambrani Dhoop cups at MDPH factory in Indore

Zed Black has set up the World’s largest raw-agarbatti manufacturing unit in MP. Share details on Capex, Global footprint & Exports.

MDPH has set up its largest agarbatti manufacturing facility in the world, spread over 15 acres with a constructed area of 400,000sqft consisting of 650 machines, producing 50 tonnes of wet incense, along with raw incense, dhoop cones, dhoop sticks in the same unit. Total production of 60 metric tonnes is produced everyday in the unit.

According to reports, MDPH is setting up two new factories which will add a manufacturing space of 3 lac sq.ft to the existing 7 lac sqft area in Madhya Pradesh making it world’s largest raw agarbatti manufacturing unit with 10 Lakh Sq ft area in size. Share details on employment generation.

We are setting up two new manufacturing units, one at Rampipliya, (Indore) and another at Kshipra Village (Indore). The two new factories will add a manufacturing space of 3 lac sq.ft to the existing 7 lac sqft area in Madhya Pradesh making it world’s largest raw agarbatti manufacturing unit with 10 Lakh sq ft area in size. The plant is expected to generate 1500 new jobs. MDPH already has around 4,000 employees working. The new factory has generated employment to over 1,500 new employees, making it a strong workforce with around 90% women employees working with the company. The new greenfield unit set-up on a 15 acre land with a constructed area of 2,50,000 sq ft.is the world’s largest raw agarbatti factory. It is a backward integration unit to manufacture raw materials such as raw agarbatti, raw dhoop cones, raw dhoop sticks and hawan samagri.

Agarbatti consumption increases during the festive season, share statistics.

In India, people use agarbatti for their daily prayers. During the back-to-back festivals starting from monsoon to Diwali, we have a strong inclination towards god and prayers, the consumption increases by 30% to 40% above the daily usage in this period.

Demand for trendy, innovative fragrances globally like Camphor, Cinnamon, Pineapple, Cherry-Rose, etc. Globally the demand for agarbattiis usually from Indians residing in foreign lands, but there is a trend seen as agarbatti is being used for lifestyle purposes. In many countries, popular fragrances from MDPH are rose, jasmine, however people also use agarbatti for belief, and fragrances like chamomile, white sage which are based on concepts like attracting money, getting customers to shops, etc., have heavy demand.

Our brand ambassadors Ace Cricketer M S Dhoni for Zed Black 3-in-1 Agarbatti & Bollywood Superstar Hrithik Roshan for Bamboo-less Dhoop brand ‘Manthan’ are carefully chosen to amplify the buzz in specific regions. The company intends to focus on a host of regional fragrances apart from experimenting with innovative methods in R&D in the near future.

Purchase behaviour of consumers, market share of trusted brands vs unorganized players.

Thanks to Covid, there is a significant change in trend where consumers are relying on branded products, and the market share is increasing and we have a nice mix of players in this category. But in the rural and ultra-rural markets, it is the un-organized players who are still gaining a bigger market share as most branded agarbattis are priced higher.

Zed Black’s TVC with MS Dhoni recently went viral for Dhoni’s looks. How important is the Celebrity quotient considering MDPH has two A-lister celebrities as Brand Ambassadors, MS Dhoni for Zed Black and Hrithik Roshan for Manthan Dhoop.

MDPH signed popular cricketer M S Dhoni in 2017, and we also signed Bollywood superstar Hrithik Roshan in 2020. Every 2 years we have been endorsing an A List celebrity, which is proof that the celebrity quotient is very high especially in a product like agarbatti. Having a celebrity endorsement is needed for the rural markets as it gives the consumers belief about the product quality.

This year, brands and advertisers have a troika of opportunities in H2 – the festive season, remainder of IPL 2021 and ICC World Cup. How do you see brands and advertisers leveraging these opportunities, especially your sector.

With the impact of second wave lessening and the market picking up for the festival, there is a lot of scope for advertising, with the remainder of IPL 2021 which is ongoing & ICC World Cup 2021 is coming up right at the peak season. This is a great opportunity for companies especially in the agarbatti sector, to showcase their brands to the consumers through various mediums like TVC, Social Media and more. Cricket is likely to steal the show at the prime time as the matches will be at evening time, which is a prime time for GEC.