Swedish Match plans unit

Swedish Match Consumer Products Ltd, the Indian arm of Swedish Match, is planning to set up a local manufacturing unit for the production of the brand, Click.

B Mukherjee, president of Indian operations, said: "The market is extremely competitive and currently our volumes do not justify production. But if we can even tap 1 per cent of the Rs 4,000 crore (Rs 40 billion) branded gutka market by 2005, we will surely set up a manufacturing base in India."

The product, currently, attracts 116 per cent import duty. In addition, a third flavour, called Click Original, will be rolled out in the Indian market early next month.

"This has been adapted from the most popular flavour in Sweden called General," he added.

Launched in India two years back and positioned as a safer alternative to tobacco, Click, the company claims, has a huge potential considering that India has the highest incidence of oral cancer which can be contained if tobacco consumers were to switch over to snus. The market for tobacco-related products is estimated at Rs 30,000-40,000 crore (Rs 300-Rs 400 billion).

"As per the WHO, there are nearly 240 million smokers and 40 per cent are into oral tobacco. Of which, 600,000 are expected to die next year owing to lung cancer. Now snus can bring down the prevalence of tobacco-related diseases," Patrik Hildingsson, director, public affairs at Swedish Match, said.

Since Sweden, he said, was found to have the least number of tobacco-related diseases because of the difference in consumption pattern by WHO.

"Moreover the product is governed by the Gothia Tek standard which sets the maximum permissible limits of certain undesired components in tobacco," Hildingsson said.

The strategy in India is clear and the focus is on conversion, Mukherjee added. "Thus the strategic target group are cigarette smokers and chewers. We do not intend to add new consumers for Click but only educate existing users about the benefits offered by snus which has no side effects," he said.

As part of its communication strategy and to reach out to its target customers, the company is educating paanwallahs on the use and benefits of the product who can then demonstrate the same to their customers.

While India was the first export market for snus, the company is now also test marketing the product in Russia and the US.