ITC looking at new products in ghee segment

Diversified conglomerate ITC Ltd, which entered the dairy segment with the launch of its ghee in October 2015, is targeting a larger play in the space.

The company is looking at new products in the segment and larger foray across southern markets.

The Kolkata-based FMCG major had launched the ghee under the ‘Aashirvaad Svasti’ brand in Karnataka. Sources indicate that the product is now being rolled out in Tamil Nadu.

The Aashirvaad brand is pegged at over ₹3,000 crore, and controls nearly 75 per cent of the country’s branded ‘atta’ market.

“We will deepen our focus in the existing sectors and are also evaluating new categories,” Sanjiv Puri, Executive Director, ITC, told BusinessLine during an interview.

He, however, did not specify the product range that the company is exploring, but maintained that offerings will be “specifically suited to local tastes”, as per the company’s strategy on regional focus.

“Commencing with entry into the ghee segment, the intention is to craft differentiated and value-added products which would be hallmarks of quality. We are taking a regional approach and the ghee is customised to cater to local preferences,” he added.

While Puri did not mention the exact investment that has gone into setting up the dairy business, a “significant portion” of the targeted investments of ₹25,000 crore for ITC over the next few years would be in foods.

“For the foray into the dairy segment, ITC has worked extensively on creating a strong back-end,” he said.

Currently, the company is sourcing its dairy products from its Munger facility in Bihar. Plans, according to sources, are also afoot to set up similar processing facilities in other parts of the country as well.

While ITC does not give revenue details of its foods business separately, juices, dairy and food items are categorised under the “others” FMCG head.

The segment reported a total revenue of around ₹6,445 crore (almost 24 per cent of net sales) and a loss (before tax) of ₹14 crore for the first nine months (ending December 2015) of this fiscal.