ITC, Others Resume Cigarette Manufacturing After Rs.5,250 crore Loss

cigaretteAfter a loss of Rs.5,250 crore loss, cigarettes makers including ITC on Friday said they will resume manufacturing of cigarettes in factories without the larger pictorial warnings on the packs under the new notification, leaving it an open-ended issue for now.

The new rule to spare 85% of the display area on packets has been opposed by cigarette makers, who have stopped production of cigarettes for over 15 days seeking clarifications from the government. It requires “substantial resources in creating the large number of cylinders and other tools necessary for a change-over of the warnings”.

All the three major cigarette makers, ITC, Godfrey Philips and Sultan Virginia had shut its cigarette factories from April 1, 2016. “Consequent upon a High Court order passed in favour of the company, the company will soon resume manufacturing of cigarettes at its factories,” ITC said in a filing to the BSE.

ITC has top branded cigarettes in its kitty such as King Lights, India Kings, Classic, Gold Flake, Navy Cut, Capstan, Bristol, Flake, Silk Cut, manufactured at plants in Bangalore, Munger, Saharanpur, Kolkata and Pune and it sold Rs.38,4339 crore worth cigarettes in 2014-15.

The shut down resulted in an estimated Rs.350 crore loss daily in the last 15 days amounting to Rs.5,250 crore.

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