ITC Targets $500 Million Potential Market in Premium Tobacco Exports

Business by 2FIRSTS.ai
Dec.14.2023
ITC Targets $500 Million Potential Market in Premium Tobacco Exports
Indian conglomerate ITC has discovered a $500 million potential market in high-end nicotine and its derivatives exports.

According to a report by Indian media outlet Economic Times, Indian conglomerate ITC has announced the discovery of another potential $500 million market in the tobacco industry, this time in the export of premium tobacco and its derivative products.

 

Analyst Vivek Maheshwari suggests that the current value of the nicotine market is $500 million, with an expected supply-demand gap of 50% in the coming years.

 

On Tuesday, the management team of ITC stated at an investor meeting with analysts that they have identified nicotine as the new growth driver for their agricultural business. The increasing demand for tobacco products and smoking worldwide has led to a growing interest in high-end nicotine.

 

India's tobacco industry has gained prominence due to its high nicotine content. Explaining this, Maheshwari stated, "This product has a high profitability rate due to its complex processing and high entry barriers. ITC has implemented a farm-to-bottle/bag model here through its robust procurement capabilities. It also offers customers complete traceability, which is highly valued.

 

Due to the special processing technology of nicotine, business profit margins are all above 50%, which includes the growing preference for ESG compliant supply chains in high-end nicotine products across the globe. ITC plans to leverage its institutional capabilities in the tobacco leaf business and intends to manufacture the purest nicotine in accordance with strict standards in the United States and Europe.

 

Sharekhan stated that "this is a high-profit business with a 50% stake, which can provide strong profit support for ITC's agricultural business.

 

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