Viraj Shah – The Pioneer of Automation in the Incense Sticks Industry
Viraj Shah of Arsi Industries, Ahmedabad is credited to be the pioneer for the automation of incense stick production in India. He was the first to use automated incense stick machine for production. Today, 15 years later the course of incense stick making changed from hand rolled cottage industry to fully automatic heavy tonnage industry. In a conversation with Sugandha India, Viraj Rohit Kumar Shah said that in 2007, when I first introduced automatic machines, many people expressed disagreement. At that time, I had also said that this industry will not run without machines. The same thing is happening today. All the big companies have fully automatic incense stick production plants. Following that the packaging is also automated now. Viraj bhai told that by educational qualification, he is an instrumentation and control engineer. Today the demand for incense sticks has increased in the country and there is a shortage of workers, only machines can meet the country wide demand.
Viraj Shah, in an exclusive conversation with Sugandh India said that his grandfather started the business of incense sticks and perfumes in 1947. He used to sell hair oil. When textile mills started shutting down in Gujarat, my grandfather brought the incense industry from Bangalore to Ahmedabad and set up a company here to employ the workers. At that time, he used to supply masala agarbatti to various brands across the country. Back then in Ahmedabad, we were producing 10 to 15 thousand kg incense sticks per day in bulk. In 1980, we established our own brand by the name ARSI and spread it pan-India. In 2001 we set up an office in Mumbai. Today the company has more than 300 brands, sold across the country as well as in 19 countries. The company’s Arsi brand incense sticks have been very popular. Apart from this, the company also does job work on a large scale. From 2005 to 2007 consecutively, we received the Largest Growing Export Company Award from the Central Government. Viraj Shah has been the President of the of GAMDA (Gujarat Agarbatti Manufacturers and Dealers Association) and has been on the Managing Committee of AIAMA (All India Agarbatti Manufacturers Association) for several years. He was also placed on the Advisory Board for an event of Essential Oil Committee and has been the Co-Chairman of the Gujarat Chamber of Commerce for two terms.
In response to a question about the changes taking place in the incense stick industry, Viraj Shah said that I joined this business in 1994 and from what I have seen over the years, this seems the only industry where prices have not changed over decades. To survive, companies are compromising on quality or packaging or number of sticks. Inflation has highly gone up over the time, but the prices of incense sticks have not increased. The main reason for this is that the competition has also increased a lot than before and the major market demand is not rising above 10-20 Rs segment. However, a new trend has emerged in recent years where a large consumer segment is paying higher rates for good quality.
In response to a question regarding Arsi’s product portfolio, he said that the company is manufacturing incense stick products ranging from Rs 5 to Rs 1000 per box along with all type of Scented, Flora to Masala agarbatti for other brands. Apart from this, dhoop, cones and camphor are also part of the portfolio. He told that Arsi doesn’t have a particular national brand. We have different products selling across different states and regions.
He informed that it is not possible for products costing 10₹ or 20₹ to be sold to distant states; as this increases the cost and freight. Only expensive and premium quality products are sent to distant states. In response to a question, he said that only quality products made with natural ingredients shall run in the future.
On the question regarding fragrance trends, He said that floral and fancy perfume fragrances are more liked in India. In the Gulf and the Middle East, oriental and natural fragrances are preferred. In other markets, fruity and spicy notes are in demand.
He said the market has improved a lot after the Corona crisis. More hard work needs to be done, as demands have grown manifolds. Competition is cut-throat in the market. Moreover, companies are reducing margins too much. This never is going to work and surely fail them in future.
On the question of mass production and proper management of job work for other companies— he said that we have decentralized our manufacturing. We have several trusted partners who have been tasked with different assignments. All of them are doing extremely well. We don’t do everything in-house. Value added products and perfumery work is done in-house.
In response to a question from Sugandh India regarding his contribution to the industry being part of various associations, he said that there are many challenges in the industry. Excise was imposed on incense sticks and then a 12% GST was introduced. We talked with the government and gave a proposal to reduce it further to 5%. Raw materials attract 18% GST. The industry is now getting refunds.
He said that there has been a major change in the industry for those who have been in business for generations. They are shifting now. My grandfather handed over the business and its knowledge to my father and my father to me. Today, the new generation isn’t that keen on taking the family business further. New players are coming in their place. It is also a challenge for the long-running businesses in the incense stick industry: their children are either settling abroad or switching to other industries. Due to this, the traditional knowledge of the Incense stick fragrance industry is diminishing.
Responding to another question, he said that there have been major changes in brand development and fragrances. Online trading is common. Incense stick is a product of daily use. It is a perishable item bought daily throughout the year by the rich and the ordinary and it costs very less. That’s why people try new brands often. New fragrances are launched in new and attractive packaging. Consumers love trying out something new. It is not an expensive product like a car and TV. That’s why people keep changing brands without thinking.
