Diversified conglomerate ITC plans an investment outlay of around ₹20,000 crore in the next five year, and a “large component” of that will be going into into the non-Cigarette FMCG business.

“Despite the headwinds, the investments made across all our businesses to enhance structural competitiveness and build an enterprise of the future, position our company well to leverage emerging opportunities in the market. Our confidence in the India story is unwavering and is reflected in our company’s investment outlay of about ₹20,000 crore in the medium term,” ITC Ltd Chairman and Managing Director Sanjiv Puri said, while addressing the company’s annual general meeting on Friday.

Later during an interaction with mediapersons, Puri said a larger component, roughly around 35-40 per cent, of the Rs 20,000 crore investment will be going into the non-Cigarette FMCG business. “And another third or little bit less than that will be going into Paperboards & Packaging. The balance will get into other businesses as in Agri, our traditional business and also get into certain operate investments that happen,” he elaborated.

The investments are largely for capacity augmentation, and also for upgradation, modernisation and innovation.

The company, which has been launching food products in health and nutrition, is planning to rollout a nwe brand “Rightshift”, target the consumer of the age group of 40 and above for stregnth and energy building. “Slowly we will add more vectors to that porfolio. This has proprietary formulations created at our ITC Lifescience and technology centre. But these are all completely natural products,”

“Rightshift will be snaking items, drinks, it will be a portfolio.

Primiumisation is doing well it is growing at a rate that is significantly more than the average rates.

The company has recently lauched Gee with law colesterol

“our company is also proactively pursuing strategic investments, particularly in neighbouring markets, such as the FMCG facility set up by our company’s subsidiary, Surya Nepal,” Puri told shareholders.

Speaking to the media, he said as far as international markets are concerned, the company was looking at exports to a large number of countries. The company is looking at more stragetic presents in these overeases markets. “By starategic presents, I am saying local manufacturing and more investments in building brands and our own distribution in such markets. We started the journey through our subsidiary in Nepal, and there are other markets which are currently looking at. Once we have the right opportunity we will move there,”

Over a period of time, the company will also look at more strategic place in another markets.

“We have given a guidance that we will see continued margin expansion on an average of 100 basis points per year...that is now our focus and that drives ITC’ next strategy,”

FMCG investment will be in adding capacities ICMLs, adding new capacities, upgrading product quality and bringinin more innovation

The conglomerate’s Bhadrachalam unit of the Paperboards & Packaging segment is fairly saturated and for a greenfield site a new location for additional investment we are looking for a big site and then expand in a modular fashion in those areas. “Paperboard site is work in progress. We are exploring various options at the moment.

Puri said the value-added by the company’s economic activities in the last four years aggregated to around ₹2.42 lakh crore, of which over ₹1.61 lakh crore accrued to the exchequer.

He said the growing competitiveness of ITC’s world-class brands has enabled the company to take its products and services to over 100 global markets. As part of the asset-right strategy for ITC Hotels, opportunities with focus on proximal markets will continue to be explored over time, the Chairman said.

Hotel business

“The asset-right strategy, envisioned for the next horizon of growth, together with the impending move to give new wings to ITC Hotels as a pure-play entity foretells an exciting future,” he pointed out.

Notably, the the board of the cigarette-to-soap maker on August 14, 2023 approved the proposed demerger of the hotel business into a separate entity, ITC Hotels. ITC shareholders in June this year approved the conglomerate’s plan to carve-out its hotels business with an overwhelming majority.

Addressing shareholders during the AGM, Puri said the “robust pipeline” of managed properties will take the overall footprint to over 200 hotels in the coming years, enabling ITC to enlarge its contribution to employment generation.

In line with its ‘asset right’ strategy for the Hotels business, as many as 32 hotels have been opened in the last 24 months, taking the total to nearly 140 hotels.

IT arm

On the conglomerate’s non-cigarette FMCG business, the Chairman said in order to strengthen the future-ready portfolio, ITC has launched nearly 100 differentiated offerings annually.

ITC’s non-cigarette FMCG products now reach 250 million households with consumer spends of ₹32,500 crore. “The drivers of structural competitiveness unleashed by the ITC Next strategy reinforce our aspiration to be No.1 in this industry,” Puri said.

According to him, ITC’s wholly owned subsidiary, ITC Infotech, sustained its growth momentum and global expansion through capability-led strategic partnerships. In line with its ‘Orbit Next’ strategy, the IT services company also augmented its portfolio of solutions.

“During the year, the company acquired Blazeclan Technologies to strengthen its capabilities in the Cloud services space and make scalable progress in digital transformation solutions,” Puri added.

“Our focus is to build ITC infotech into very large engine of growth. Just like FMCG scaled up amongst our newer busiensses, we want Infotech to scale up. And that is why investment is being made on capability building. This business is posting a robust trajectory.

“As far as IPO is concerned, there is no plan at the moment. But these are certainly things that are the realm of possibility. These are possibilities in the future,” he added.

Related Topics