About
VST Industries Ltd
VST Industries Ltd (the erstwhile Vazir Sultan Tobacco Company) was incorporated in November 10th, 1930 at Hyderabad, AP. The Company is an associate undertaking of British American Tobacco Plc., the global leader in cigarettes. It has 2 manufacturing facilities in Hyderabad and Toopran and 6 Regional offices in Hyderabad, Mumbai, Delhi, Kolkata, Chennai and Guwahati. It is presently engaged in manufacture and trading of Cigarettes, containing Tobacco and Tobacco products.
In 1990, the company entered the United Arab Emirates market, launching Kingston Mini Kings. To develop the export business, it introduced fire-cured, light-soil Burley and other non-traditional varieties of tobacco, followed by another brand, Kingston Dual Filter, in 1991. In the same year, it was accorded the status of an export house. It also acquired an import license for two sophisticated high-speed precision Log Max cigarette manufacturing machines from France. The company also exports agricultural products.
VST's subsidiaries are Hallmark Tobacco Company Pvt Ltd, VST Distribution, Storage & Leasing Company Pvt Ltd (VDSL) and Tobacco Diversification Investments Pvt Ltd (TDIL). During the year 2004-05 Tobacco Diversification Investments Pvt Ltd amalgamated with VST Distribution, Storage & Leasing Company, which came into effect on 1st April 2004. The company has allotted 3030000 1% Unsecured Optionally Convertible Debentures of Rs 10 each, in lieu of VST's holding in the TDIL in the ratio of 1:1.
VST introduced Gold Premium Filter in Jul.'93. In 1992-93, it entered into a technical collaboration agreement with High Value Horticulture, UK. It has signed an agreement with Science and Technology Ventures, Israel. In 1994, the company incorporated VST Natural Products (formerly VST Agro Tech), to establish manufacturing facilities to process high value horticultural crops, for export. In 1994-95, the company had launched two brands - Vijay Deluxe and Charminar Standard. VST is the largest exporter of cigarettes to the Middle East from India.
SEBI cleared the open offer of Brightstar Investment to acquire 20% equity stake in the company. The Open Offer made by Bright Star Investments Ltd at Rs.112 per share was revised to Rs.151 per share and the counter offer made by Russell Credit Ltd at Rs.115 per share was also revised to Rs.125 per share respectively. Both these offers were closed in during June 2001.
Processing lines of the company have been modernized during the year 2003-04 by inducting Hauni KT2 Stem Cutter to improve filling values and reduce tobacco wastage and New Design spillage free Cut Stem and Cut Lamina Auto feeds to reduce tobacco wastage in the year 2004-05.It also installed a new humidification system with auto controls on Relative Humidity to improve stored cut tobacco moisture consistency and freshness.
In the year 2003-04 the secondary manufacturing department has also modernized by incorporated new Auto Feed Systems on individual making machines to ensure consistency of the product in. The secondary department have been modernized by inducting two Molmac MK9 MTF (one for filter and one for micros), New weight control systems (TEWS and MRK3), IPMs (individual parcellers) and installed new quality test modules to improve and maintain consistent product quality in the converted year 2004-05.
During FY 2013-14, the Company successfully converted the cigarette making and packing machines by deploying in-house expertise subject to rapid growth in the value filter 64mm segments. In continuance with its tradition, 143 workmen were trained during the year to improve their technical skills. Moreover, world-class high-speed makers and packers were inducted in the shop floor as part of the Company's upgradation plan.
The Company Petition filed by the Official Liquidator in the Hon'ble High Court of Andhra Pradesh seeking directions against some of the ExDirectors of ITC Agro Tech Finance and Investments Limited (ITCATF), the Company in liquidation, into which one of the subsidiaries of your Company, viz., VST Investments Limited was amalgamated, to file a Statement of Affairs is still pending.
The manufacturing operations of the Company had to be suspended between the later part of March, 2020 and the second week of May, 2020 due to the lockdown directives issued by the State Government and were partially resumed with restricted capacity and manpower in compliance with the applicable guidelines.
In FY'22, the Company introduced a new variant of Kesar and Saunf flavour. Total Royal Twist was launched in 2021.
During 2022-23, the Solar Power Plants of capacity 900 KW was commissioned in September 2022 for Azamabad plant and 300 KW at Toopran plant. The Company enhanced PV technology solar power plant from 1MW to 1.2MW. Total Active Mint was launched in 2022 across North Indian markets.
VST Industries Ltd
Chairman Speech
During these times of change, your Company remained committed to long term strategy,
which is focused on growth through Brand building, product innovation and digital &
retail activation. We believe this will result in sustainable growth and the Company will
remain resilient through the coming years.
Dear Shareholders
I am pleased to share your Company's performance and progress during the FY 2022-23. It
was a year of both opportunities and challenges. We successfully navigated the industry
landscape shaped by changing market dynamics and inflationary pressures.
Business Performance
Despite a challenging operating environment, your Company witnessed growth in revenues
and profitability. Revenues grew by 7.1% to reach ` 1,670 Crores in FY 2022-23, against `
1,559 Crores in FY 2021-22. Total comprehensive income stood at an all-time high of ` 328
Crores.
Operating Environment
During the year, the industry continued to face unprecedented inflationary headwinds
that increased costs of key raw materials ranging from tobacco leaf to paper packaging.
This resulted in significant cost pressures on the finished goods. Despite inflationary
pressures, end consumer prices remained largely unchanged resulting in strong volume
rebound. The growth was highest in mid-premium segment driven by up-trading, from value
segments.
Moreover, the recent Budget for FY 2023-24 introduced a 16% increase in the National
Calamity Contingent Duty (NCCD) on cigarettes resulting in a net increase of 1.6% on
overall tax.
Focused on Long Term Growth
During these times of change, your Company remained committed to long term strategy,
which is focused on growth through Brand building, product innovation and digital &
retail activation. We believe this will result in sustainable growth and the Company will
remain resilient through the coming years.
There was a significant focus on cost management by your Company to partially offset
inflationary pressures on the supply chain and to make resources available for growth.
In addition, we have carefully evaluated our pricing strategies and explored alternate
approaches to drive sales growth and have implemented new ways of engaging with multiple
trade partners and adult consumers. We initiated a digital transformation journey in the
year 2021 to upgrade our trade marketing capabilities, which is now well-established and
delivering business benefits.
Responsible Business
As your Company stays focused on business growth, minimising our environmental
footprint remains a key strategic goal. Sustainability has long been an intrinsic part of
your Company's DNA and I take pride to inform you that we published our first ESG Report
in 2022. Your Company aims to reduce emissions and the impact on the environment through
renewable energy investments, energy conservation measures, and fossil fuel substitution.
Your Company has installed solar power plants, implemented energy-efficient technologies,
and transitioned from diesel to piped natural gas. Moving forward, your Company will
continue to explore waste management, water conservation, and renewable energy sources to
accelerate sustainability efforts.
Our commitment to responsible practices aligns with our vision for a greener future.
Your Company continues to prioritise social well-being through various CSR initiatives.
We are proud to state that we have been able to impact the lives of over 26,000 families
in Telangana and Andhra Pradesh by establishing a strong foot print. Focus areas include
health and sanitation, education, environment sustainability, and farmer livelihood. Your
Company has constructed household toilets, provided infrastructure support to schools, and
conducted vocational skill training programmes and installed solar streetlights. Your
Company continues to support farmers on sustainable farming practices. These initiatives
are in line with our longstanding commitment to create a positive impact on the community
and promoting a sustainable future.
Dividend
I am delighted to announce that the Board of Directors has approved the declaration of
the Company's highest-ever dividend of ` 150 per share, representing an increase of 7%
over the previous fiscal year. This reflects our commitment to enhancing shareholder value
and recognising your unwavering support.
Pursuing Excellence
We continue to build on the rich pool of our talent, heritage and culture. Your Company
prioritises the growth and development of employees by providing continuous upskilling,
engagement, and career opportunities. We continuously strive to attract top talent,
fostering a diverse and inclusive environment where every individual is empowered to
contribute and thrive. Every individual across the Company has contributed towards its
achievements by displaying resilience, dedication, and a willingness to adapt to change.
Looking Ahead
Your Company remains committed to navigate the dynamic business landscape and drive
sustainable growth. There will be continued focus on further strengthening our brands,
exploring innovative product offerings, and leveraging digital platforms for execution
excellence.
I extend my deepest gratitude to our Board of Directors and the entire management team
for their diligent efforts on delivering a good performance and leading our dedicated
employees. Their continued support will undoubtedly play a pivotal role in driving higher
growth. I would also like to extend my heartfelt thanks to all our valued stakeholders
– our shareholders, customers, employees, and partners – for their unwavering
support and trust. Your Company remains dedicated to delivering long-term value and
upholding the highest standards of corporate governance and transparency. Together, we
will embrace the challenges and emerge stronger to drive sustainable growth.
Thank you,
NARESH SETHI
Non-executive Chairman
  Â
VST Industries Ltd
Company History
VST Industries Ltd (the erstwhile Vazir Sultan Tobacco Company) was incorporated in November 10th, 1930 at Hyderabad, AP. The Company is an associate undertaking of British American Tobacco Plc., the global leader in cigarettes. It has 2 manufacturing facilities in Hyderabad and Toopran and 6 Regional offices in Hyderabad, Mumbai, Delhi, Kolkata, Chennai and Guwahati. It is presently engaged in manufacture and trading of Cigarettes, containing Tobacco and Tobacco products.
In 1990, the company entered the United Arab Emirates market, launching Kingston Mini Kings. To develop the export business, it introduced fire-cured, light-soil Burley and other non-traditional varieties of tobacco, followed by another brand, Kingston Dual Filter, in 1991. In the same year, it was accorded the status of an export house. It also acquired an import license for two sophisticated high-speed precision Log Max cigarette manufacturing machines from France. The company also exports agricultural products.
VST's subsidiaries are Hallmark Tobacco Company Pvt Ltd, VST Distribution, Storage & Leasing Company Pvt Ltd (VDSL) and Tobacco Diversification Investments Pvt Ltd (TDIL). During the year 2004-05 Tobacco Diversification Investments Pvt Ltd amalgamated with VST Distribution, Storage & Leasing Company, which came into effect on 1st April 2004. The company has allotted 3030000 1% Unsecured Optionally Convertible Debentures of Rs 10 each, in lieu of VST's holding in the TDIL in the ratio of 1:1.
VST introduced Gold Premium Filter in Jul.'93. In 1992-93, it entered into a technical collaboration agreement with High Value Horticulture, UK. It has signed an agreement with Science and Technology Ventures, Israel. In 1994, the company incorporated VST Natural Products (formerly VST Agro Tech), to establish manufacturing facilities to process high value horticultural crops, for export. In 1994-95, the company had launched two brands - Vijay Deluxe and Charminar Standard. VST is the largest exporter of cigarettes to the Middle East from India.
SEBI cleared the open offer of Brightstar Investment to acquire 20% equity stake in the company. The Open Offer made by Bright Star Investments Ltd at Rs.112 per share was revised to Rs.151 per share and the counter offer made by Russell Credit Ltd at Rs.115 per share was also revised to Rs.125 per share respectively. Both these offers were closed in during June 2001.
Processing lines of the company have been modernized during the year 2003-04 by inducting Hauni KT2 Stem Cutter to improve filling values and reduce tobacco wastage and New Design spillage free Cut Stem and Cut Lamina Auto feeds to reduce tobacco wastage in the year 2004-05.It also installed a new humidification system with auto controls on Relative Humidity to improve stored cut tobacco moisture consistency and freshness.
In the year 2003-04 the secondary manufacturing department has also modernized by incorporated new Auto Feed Systems on individual making machines to ensure consistency of the product in. The secondary department have been modernized by inducting two Molmac MK9 MTF (one for filter and one for micros), New weight control systems (TEWS and MRK3), IPMs (individual parcellers) and installed new quality test modules to improve and maintain consistent product quality in the converted year 2004-05.
During FY 2013-14, the Company successfully converted the cigarette making and packing machines by deploying in-house expertise subject to rapid growth in the value filter 64mm segments. In continuance with its tradition, 143 workmen were trained during the year to improve their technical skills. Moreover, world-class high-speed makers and packers were inducted in the shop floor as part of the Company's upgradation plan.
The Company Petition filed by the Official Liquidator in the Hon'ble High Court of Andhra Pradesh seeking directions against some of the ExDirectors of ITC Agro Tech Finance and Investments Limited (ITCATF), the Company in liquidation, into which one of the subsidiaries of your Company, viz., VST Investments Limited was amalgamated, to file a Statement of Affairs is still pending.
The manufacturing operations of the Company had to be suspended between the later part of March, 2020 and the second week of May, 2020 due to the lockdown directives issued by the State Government and were partially resumed with restricted capacity and manpower in compliance with the applicable guidelines.
In FY'22, the Company introduced a new variant of Kesar and Saunf flavour. Total Royal Twist was launched in 2021.
During 2022-23, the Solar Power Plants of capacity 900 KW was commissioned in September 2022 for Azamabad plant and 300 KW at Toopran plant. The Company enhanced PV technology solar power plant from 1MW to 1.2MW. Total Active Mint was launched in 2022 across North Indian markets.