Date:09/02/2005 URL: http://www.thehindubusinessline.com/2005/02/09/stories/2005020902550400.htm

Back Dalmia Consumer Care to expand product portfolio

Sindhu J. Bhattacharya

New Delhi , Feb. 8

DALMIA Consumer Care (DCC), the Sanjay Dalmia group company launched in 2003, is on an expansion mode.

Started with an aim to develop products that can serve as alternatives to tobacco and tobacco products, DCC launched the Vardan beedi brand two years ago.

Enthused with the success of this product, the company has now decided to launch cigarettes with no tobacco. It is also test marketing Zing, a chewing gum containing nicotine water.

The company has decided to invest Rs 10 crore in setting up a manufacturing plant for the Chabaaza brand of flavoured gumlets.

The Managing Director of DCC, Mr Sudershan Banerjee, told Business Line "Dalmia Consumer Care will develop substitutes to replace tobacco products and create awareness about the havoc caused by the use of tobacco. It is unfortunate that the Government has not allowed us to advertise products like Vardan. But, despite the ban, we have succeeded in slowly creating awareness."

Mr Banerjee said the company was working on a tobacco-less cigarette, but this product will not be launched in India. "As per existing laws, tobacco-free cigarettes attract excise of Re 1 per piece. Besides, we won't be allowed to advertise this product. All these restrictions have forced us to launch this product in European countries and it should be ready in about a year."

Asked about the funds for the proposed expansion, Mr Banerjee said the parent company had invested Rs 60 crore till date in product research and development, advertising and promotion.

"We are targeting break-even by 2007," he added.

He said the company was setting up its first manufacturing plant near Dehradun to manufacture Chabaaza, with an initial installed capacity of 300 tonnes per year.

This brand is currently made by contract manufacturers in Gujarat and Maharashtra.

Besides Chabaaza, Zing and Vardan, DCC also plans to develop products with low tobacco content and nicotine containing tobacco-free smokes.

According to estimates by the World Health Organisation, the Indian Council of Medical Research and others, India accounts for 15 per cent of the 2.5 billion tobacco users globally and 2,200 Indians are being killed every day due to tobacco use.