GTC Banks on `Low Tobacco' Cigarettes to Drive Growth

Source from:  thehindubusinessline.com Bangalore 07/06/2005

GOLDEN Tobacco Company (GTC) has said introduction of low tobacco cigarettes could play a significant role in propelling the company's organic growth in the near future. The Rs 352-crore company, with Panama as its flagship brand, stated that it has finished market trials of low tobacco cigarette blends in the South with "promising" results. "While we will continue to push our complete tobacco cigarettes, we are confident of giving the customer the option to cut down on his tobacco intake without compromising on the smoker satisfaction. We are planning to launch the low tobacco offering in bingo, plain and filter segments of the domestic cigarette industry," Mr Amar Sinha, Director, Sales & Marketing, told Business Line. "We don't want to disclose the blend, but we are looking at giving the customer a cigarette with nearly 25 per cent less tobacco content," he added. While the company is not ruling out the possibility of launching low tobacco cigarettes under the Panama brand, it will also consider fresh brands as the flagship brand is overwhelmingly identified with the bingo segment, where it accounts for 38 per cent of the sales. GTC closed last financial year reporting 16 per cent growth in volumes against an average industry growth of 9 per cent. The sales revenue touched Rs 352 crore, up from Rs 307 crore. The net profit jumped to Rs 19.73 crore as against Rs 7.48 crore in the previous year. GTC is part of the Dalmia Group, which also owns companies such as Gujarat Heavy Chemicals Ltd (GHCL). GTC said the organic growth would also entail the company making a renewed push for a significant break into the premium filter cigarette segment, which is dominated by behemoths such as ITC. The company is also mapping entry into other tobacco and non-tobacco categories that will sell through similar outlets as cigarettes. Enditem