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Cycle the leader in domestic incense market

Monday, 28 May 2012 - 11:46am IST | Place: Bangalore | Agency: dna

Cycle is the leader in domestic incense market, with a 15% market share.

Consider this: Agarbattis handcrafted by women from remote parts of Karnataka, Andhra Pradesh and Odisha are spreading fragrance in homes in Brazil, Chile and the US.

Surprised? Well, you shouldn’t be. Handcrafted incense sticks are becoming as fashionable as yoga and ayurveda in the West, thanks to the growing fascination among westerners for Eastern culture.

Cycle Pure Agarbathies, the flagship brand of Mysore-based NR Group, is keeping no stones unturned to make the brand a hit among youngsters as well. Keeping pace with the times, the company plans to launch its e-portal next month.

“We have to constantly innovate. The scope of growth in the industry is very limited. There are no economies of scale,” said Arjun M Ranga, managing partner of the third-generation business conglomerate founded by his grandfather NR Ranga in 1948.

With the untimely demise of his father, NR Ranga was faced with the responsibility of raising the family from a young age. “My grandfather had to work hard to earn a living. He used to take tuition for his classmates and seniors,” said Ranga.

Years later, having saved up a modest Rs500, Ranga moved to Mysore from Coorg where he was working in a coffee estate. “Post independence, he felt the time was right for him to start something of his own. He started by trading various products and then saw an opportunity in the agarbatti industry.”

Today Cycle is a household name across the country. For TK Bhattacharya, a retired banker, ‘Cycle all-in-one pack’ is the best buy. “It smells great and gives value for money. I purchase a pack and it lasts for around five months.”

Speaking on how the name ‘Cycle’ came about, Ranga said: “My grandfather wanted a universal symbol that would mean the same anywhere in the world. For instance, a cycle is called a cycle in any language,” he said.

The company received its first export order from Sri Lanka in 1954. Soon it started exporting agarbattis to other countries, including the US, Chile, Japan and Africa. The company, which exported agarbattis to only 12 countries in 2001, now enjoys a presence in over 60 countries. Cycle is also the leader in the agarbatti industry in the country worth Rs1,500 crore, with a 15% share in the organised market, followed by ITC.

“The West is a growing market for us as there is a huge fascination for eastern culture among westerners. The US is our biggest market overseas,” Ranga said, adding that though incense sticks are purchased for spiritual purposes in the West, they are also popular as a fragrance product.

Gulshan Dhawan, who has been living in New Jersey for the past 30 years, is a big fan of the brand. “Every time someone came from India, I used to ask him/her to bring around 10 packets of Cycle’s sandalwood agarbatti which has a very natural aroma. Thankfully, the brand is now available at the supermarket here. I also present these agarbattis as gifts to my American friends here,” said Dhawan.

The company is keen to come up with unique fragrances. “We set up a dedicated fragrance laboratory in 1958. All our fragrances are developed in-house and only family members know the secret ingredients. There is a constant need to innovate and come up with new combinations and permutations. A few years ago, fruity scents were in great demand; now people prefer earthy, musky fragrances,” Ranga said.

“Creating fragrance is a scientific and lengthy process. My brother has done a degree specialising in the art of making fragrance,” he added.

Recognising the need to stay competitive, the company diversified into products like car freshener and home decor products. “We will launch more products later this year,” Ranga said.

The company also puts a lot of emphasis on packaging its products, with around 20 designers working on revamping and modernising the brand’s look. Among the designers are those who are recruited from National Institute of Design (NID).

Jobs for rural women
The humble agarbatti provides employment to more than 30,000 rural women across the country. “We train these woman who work from home and deliver raw materials to their doorstep. The woman, called, ‘home workers’, roll about 10 kgs of bamboo sticks a month, with a potential to earn Rs3,500,” Ranga said. The company also takes the responsibility of educating children of poor employees.

Take the case of 29-year-old Manjamma. She is happy as she can now repay the loan of Rs2,000 her husband had taken from a local moneylender. “Once rolled into charcoal powder and adhesive, the bamboo sticks get transformed into raw agarbattis, which are then taken to the factory where fragrance is added and packaging is done,” she said. Manjamma starts work at 10 am, after completing household chores and sending her kids to the school, and winds up work By 6 pm.

Like most labour-intensive sectors, the agarbatti industry is also facing shortage of people. “With industrialisation taking place at a rampant pace, women have more options to choose from. They prefer working as maids and housekeepers where remuneration is more attractive. They are no longer keen on housework,” Ranga said. The increase in the prices of raw materials also eats into the company’s margins.

However, a chief executive of a rival company is all praise for the brand. “Though we are rivals, I must admit that Cycle’s success gave us confidence to enter this industry,” he said on the condition of anonymity.

Asked about the company’s outlook, Ranga said it will continue to strive to provide more employment and give back to the society. “We would also like to give people more reasons to pray,” he laughed.

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