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'Innovation to drive ITC growth'

ITC, which completed 100 years on Tuesday, has come a long way from being a pure tobacco company to become a well-diversified, fast-moving-consumer-goods company (FMCG) and is eyeing major investment opportunities over the next decade to spur growth in these areas. Its growth mantra: Innovation. HT reports.

business Updated: Aug 24, 2010 23:31 IST
HT Correspondent

ITC, which completed 100 years on Tuesday, has come a long way from being a pure tobacco company to become a well-diversified, fast-moving-consumer-goods company (FMCG) and is eyeing major investment opportunities over the next decade to spur growth in these areas. Its growth mantra: Innovation.

Focus on value creation

ITC turned 100 years old on Tuesday.

The company sees opportunities to invest R8,000 cr over 7-10 years in the FMCG sector.

ITC plans to leverage its

E-Choupal infrastructure to widen its FMCG network.

The Harvard Business School had taken up e-Choupal as a case study in 2004.

The company is looking at investing heavily in paper, paperboards and packaging businesses.

The global anti-tobacco movement and heavy taxation on cigarettes prompted ITC to diversify into other businesses.

Now ITC is present in food products, hotel and restaurants, commercial complexes, computer software, trading and finance — and cigarettes.

"Innovation should be a source for creating consumer delight as well as triple bottomline performance so as to generate greater value for the shareholder and the society at large," ITC Chairman Y.C. Deveshwar told the company's 29,000 employees across the country through a webcast at its centenary event from Kolkata on Tuesday.

"The prime focus should always be on value creation for the Indian society and this is best achieved by creating sustainable livelihoods and replenishing natural capital."

The R26,863 crore company is eyeing investment prospects of R8,000 crore over the next seven to 10 years in the FMCG sector, spanning apparel, branded packaged foods, education, stationery products, safety matches and incense sticks and more recently personal care products.

"I can sight an investment opportunity for ITC of upto R8,000 crore over the next seven to 10 years to drive growth in this sector," Deveshwar had said at the company's annual general meeting last month.

ITC's agri-business, with the unique e-choupal infrastructure — a web based information and procurement tool for farmers — will be progressively leveraged to widen the company's FMCG network.

The Harvard Business School had taken up e-Choupal as a case study in 2004.

The company also expects to have up to 60 new hotel properties operational in the next three to four years.

"So in the next three to four years ITC will have up to 60 new properties operational," ITC Ltd Chief Executive Hotels Division Nakul Anand told PTI on the sidelines of Hoteliers Conclave here.

At the firm's AGM last month, Deveshwar had stated that the Indian hospitality sector offered investment opportunity of up to R9,000 crore in next seven to 10 years.

"At conservative estimates, India needs 50,000 rooms in the next two-three years. This sector, too, carries an investment opportunity of up to R9,000 crore in next 7-10 years to fuel growth," Deveshwar had said.

Slower growth in cigarettes business with the global anti-tobacco movement gaining momentum and the heavy taxation policy followed by the government for cigarettes prompted ITC to diversify into other businesses.

Today, its business spawns across several subsidiaries engaged in various business activities such as food products, hotel and restaurants, commercial complexes, computer software, trading and finance among others.

The company is looking at investing heavily in paper, paperboards and packaging business. "I can sight an investment opportunity of up to R6,000 crore to secure growth (in paper)," Deveshwar had said.