Duncans Industries Ltd
Strategic Direction
·
Duncans Industries Ltd is
expected to continue to focus on extending its distribution reach in rural
areas and target value growth in urban areas by pushing premium brand variants.
The company is also expected to expand its share of the health and wellness segment
in tea.
Key Facts
|
Full name
of company:
|
Duncans
Industries Ltd
|
|
Address:
|
Duncan
House, 31, N.S. Road. Kolkata - 700001
|
|
Tel:
|
91-33-2230962/2185
|
|
Fax:
|
91-33-22486021
|
|
www:
|
www.duncans-tea.com
|
|
Activities:
|
Tea, power
generation, chemicals, petrochemicals, and fertilisers.
|
Source: Company reports
|
|
2006
|
2007
|
2008
|
|
Net sales
|
Rs1,669
million
|
Rs1,010
million
|
Rs1,029
million
|
|
Net loss
|
Rs7,989
million
|
Rs1,614
million
|
Rs2,287million
|
Source: Company research
Note: Year end March
Company Background
·
The company was formed in 1951
and is part of the Duncan Goenka Group. The group has four thrust areas - power
generation, agro-based ventures, chemicals and petrochemicals and frontier
sciences such as software and biotechnology.
·
In addition to tea, the company
operates in power generation, chemical, petrochemical and fertiliser
industries.
·
The company has national
coverage with regional offices and depots in all four regions in India. The
company is initiating various marketing and distribution tie-ups to expand its
rural coverage.
·
The company is publicly traded
and is not known to be looking for funding to realise its growth strategies.
·
The company has recently
undertaken several innovative distribution tie-ups to increase its rural
penetration. It has tied up with LPG suppliers Bharat Petroleum Corporation and
Hindustan Petroleum Corporation to make their tea products available at
consumers’ doorsteps along with the refills for domestic cooking gas. The
company has also secured a tie-up for institutional sales with Indian Railways
Catering and Tourism Corporation. It is also expected to make its products
available through rural post offices in Maharashtra.
·
The company retooled its brand
portfolio in mid 2008 with the relaunch of its flagship brand Duncans Double
Diamond and the launch of several new brands including super-premium brand
Duncans Double Diamond Gold and economy brand Aaag. It has also moved into
green tea with Duncans Double Diamond green tea bags.
Production
·
The company cultivates and
manufactures its tea in East India.
·
Duncans already has 1,200
distributors across the country and has added 600 more through its new tie-ups
with Bharat Petroleum and Hindustan Petroleum.
·
The company exports to several
neighbouring and farther markets.
·
The company is not known to
undertake third party manufacturing.
Competitive Positioning
·
Duncans Industries ranked sixth
in hot drinks with a 4% share of off-trade value sales in 2008. The company
lags far behind Hindustan Unilever on 32% and Tata Tea with a 24% value share
in tea.
·
The company’s share of tea in
India has been growing over the review period as it has made significant
improvements in its distribution reach and specifically targeted rural and
semi-urban areas. In 2008 it has retooled its brand portfolio with the
introduction of new premium and economy variants that have increased its share
of tea in India substantially.
·
As the company only operates in
tea, it is positioned in a mature, slow volume growth segment of hot drinks.
However, its innovative distribution tie-ups and strategies will enable it to
leverage the untapped growth potential in rural areas. The company has also
moved into the slowly emerging green tea and premium speciality tea category in
2008.
·
The company has a wide
portfolio in tea that caters to different consumer segments based on price,
variety and quality of tea.
·
The company is positioned
across the price segments with separate brands catering to the economy,
mid-priced and premium segments.
·
Duncans is a leader in terms of
developing innovative marketing and distribution strategies. In particular its
tie-ups with cooking gas suppliers and the postal authorities to extend its
distribution reach in the rural areas are the first of their kind in the
industry.
|
Product
type
|
Value share
|
Rank
|
|
Tea
|
7
|
3
|
Source: Euromonitor International
