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Surya Tobacco Company Analysis

Updated February 5, 2021
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Surya Tobacco Company Analysis essay

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Surya Nepal Private Limited (Surya Tobacco)

Company overview

Surya Nepal Private Limited (SNPL), 1986 is an Indo-Nepal-UK joint venture company. It is the largest private-sector enterprise in Nepal working as a subsidiary of ITC Ltd. It is a joint venture between ITC (Indian Tobacco Company), Nepalese entrepreneurs, and BAT(British American Tobacco). Its factory is located in Simra with the headquarters in Kathmandu.

It produces various brands like Surya, Shikhar, Khukuri, Bijuli, and Chautari, Among them, Surya has the highest demand among people.

Logo

”Our logo stands for our ethos and the beliefs we hold true as a company. It reflects our passion for quality and excellence and our compelling vision to create enduring value for all our stakeholders. The mountain stands for our deep roots in Nepal and connotes a sense of solidity and permanence, symbolic of our position as the nation’s foremost professionally managed company. The rising sun stands for leadership as well as our passion for excellence. It encapsulates the pioneering spirit that inspires us to create and innovate products that adhere to the highest international standards as well as create enduring value for our stakeholders. The sun also represents the optimism that we feel for the future, and our deep conviction that, by generating employment, earning foreign exchange and through our various CSR efforts, help create a better, brighter tomorrow for everyone.” – By Surya Nepal Pvt. Ltd.

Purpose and Objectives

  • To be the first choice of Nepalese people for cigareetes.
  • To enlarge the business and increase the profitability.
  • To provide superior quality of cigarettes to people.

International Business Environment

Today Surya Nepal has around 5,000 wholesalers, 60 whole distributors and more than 85000 retailers in Nepal. All these sectors are consistently putting effort to make Surya Nepal one of the leading brands in Nepal. It is joint venture between ITC(Indian Tobacco Company) holding 59%, share of 39% by Nepalese entreprenuers where as 2% of share is holded by BAT(British American Tobacco). It has generated total turnover of around $100 million by manufacturing cigarettes and readymade garments inside Nepal as well as exporting garments to foreign markets.It has around 70% to 75% of Nepali market share in the field of cigarettes. It had around 95% of total Nepalese market share in premium segment. In high segment it had a total of 82% – 85% of total market share where as in lower segment it was only 60% of total market share in Nepal. The major fund supplier of SNPL is Nabil bank where as insurance of the company is holded by Standard Chartered bank limited.

Awards by Surya Nepal

  1. Winner of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Excellence Award (June 2007).
  2. Feliciation by Government of Nepal for being highest tax payer in the country for year 2071-72.

Where as other awards include :

  1. ISO 9001:2000 Certificate – Garments (October 2005)
  2. ISO 9001-2000 Certificate (October 2001)
  3. NICCI Excellence Award – Big Industries Group (June 2006)
  4. Highest Excise Payer in Country (2068-69)
  5. Highest Excise Payer in country (2070-71)
  6. SA 8000:2008 (December 2015)
  7. ISO 50001-2011 Certificate – Simara (September 2016)
  8. ISO 9001:2015 Certificate – Seratar (August 2016)
  9. OHSAS 18001:2007 (november 2016)
  10. Indian Green Building Council (IGBC) Green Factory Building ‘Gold’ rating (April 2016)

Competitors

  • Janakpur Cigarette Factory : It produces Yak, Gaida, Laliguras(later discontinued) and Deaurali.
  • Nepal Tobacco Company : It produces Shangrila, Nepal Gold Flake, Yeti, Gorkha, and so.on.
  • Perfect Blends Pvt. Ltd : IT is an initiative of Chaudhari Group with brands like Pine, Sahasi and Gaurav.
  • Seti Cigarette Factory : Major distributor of Marlboro and L & M.
  • Gorkha Lahari Pvt. Ltd : Brands like Nepal Gold Flake and Sahara filter are its main brands. Other brands include Bahar Special plain, Style filter, Brown filter kings, Gorkha filter, Bigul plain, Action kings and Winner filter.

Background Details

Surya Nepal is joint venture between ITC, BAT and nepalese entrepreneurs. It was established in 1987. The initial or first product of Surya Nepal were Naulo and Bijuli. Later on it diversified to Surya, Shikhar, Khukuri and Chautari. Nanil bank is the major fund supplier of Surya Nepal.

Products and Services

Cigarette

Surya Classic, Surya Luxury Kings, Surya Lights, Shikhar, Shikhar Lights, Khukuri Filter, Bijului and Chautari

Note :

a. On the basis of size of packet :
Small – 10 cigarettes per packet
Large – 20 cigarettes per packet

b. On the basis of size of filter :
Regular size – Filter length : 69 mm
King size – filter length : 84 mm

Size and Scope

SNPL is operating with around 5000 wholesellers in Nepal. This has porvided it about 75% of total Nepalese market shares in the field of cigarette. The company also exports readymade garment with the total turnover of more than US $100 million. It accounts 2% of GDP in Nepal. It produces different flavours of cigarette which accounts more attraction of consumers.

Vission

  1. Vision statement of SNPL is “Growth through Quality and Excellent”.
  2. To be multi-business corporation in Nepal.
  3. To be a partner in national building.

Mission

  1. To provide quality products to cunsumers.
  2. To provide superior smoking experience to all smokers.
  3. To enlarge business and increase profitability.

Business objectives

  1. To increase the quality of cigarettes.
  2. To be the leading company in the sector of cigarettes.
  3. To enlarge and generate more profit.

Organizational Structure

Stakeholders

  1. Customers: Customers are the main focus of Surya Nepal. It produces different flavours of cigarettes according to the taste of people. The trust of customers towards this company is the main reason behind the success of Surya Nepal.
  2. Employees: Many plans and policies are made for the workers/employee of the company. The company conducts different programs to build up the capabilities of employees such as; induction of new employees, attendance award, performance management, providing timely trainning, women training to make vermi composting to manage household wastes. It also have stress management yoga classes and fitness clubs for employees.
  3. Finance: For funds to the company, Nabil bank is actively participating. Similarly Standard Chartered bank limited is looking towards the insurance of the company. Due to this, the company is affected by the plans, policies and strategies of these banks. So it must be updated about the policies of the banks and work accordingly.
  4. Suppliers: The main supplier of tobacco raw materials in SNPL is India. Although the simple packaging of cigarette is done in Dhankuta, major packaging is done in other third countries. Also the cigarette wrapping paper is imported from foreign countries.
  5. Government/Legal Policies: Different tax related rules and regulations of government has greatly affected the company. Moreover, the legal rules related to the pictures on the packet of cigarette also has decreased the number of customers.
  6. Society: Society is the main market of SNPL. But in the context of Nepal, people don’t accecpt women smoking cigarettes. Also various awareness programs held in society has also adverse effect to the company. Society and company itself doesn’t prefer children (below 18 years) to smoke cigarettes. This has affected company to create new consumers.
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Surya Tobacco Company Analysis. (2020, Nov 03). Retrieved from https://samploon.com/surya-tobacco-company-analysis/

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