Diversified conglomerate ITC plans an investment outlay of around ₹20,000 crore in the next five years, and a “large component” of that will be going 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 planned ₹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 certain operate investments that happen,” he elaborated.
These investments are largely for capacity augmentation, upgradation, modernisation and innovation.
For the non-cigarette FMCG business, investment will be in Consumer Goods Manufacturing and Logistics (ICML) facilities, adding new capacities, upgrading product quality and bringing in more innovations.
The company is planning to rollout a new brand, “Rightshift”, soon, targeting consumers for the age group of 40 and above. The new brand will be a food product portfolio, which will include meals, snacking items and drinks. “Slowly, we will add more vectors to that portfolio. This has proprietary formulations created at our ITC Life Sciences and Technology Centre (LSTC) in Bengaluru. But these are all completely natural products,” the Chairman said.
Puri, during the AGM, said, “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.”
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 strategic presents in these overseas markets. “By strategic presence, 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 being looked at. Once we have the right opportunity, we will move there,” he pointed out, adding over a period of time, the company will also look at more strategic place in another markets.
On its Paperboards & Packaging segment, the company said the Bhadrachalam unit in Telangana is “fairly saturated “ now. Thus, it is looking for a big site for a greenfield project.
Hotels Business
Puri said the proposed hotels business demerger was “on track” and it was expected to be completed within a few months.
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.
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.
“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.
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
Puri said 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.
“Our focus is to build ITC Infotech into very large engine of growth. Just like FMCG scaled up amongst our newer businesses, we want Infotech to scale up. And that is why investment is being made on capability building. This business is posting a robust trajectory,” he said.
Asked about any plan for IPO for the IT arm, the Chairman said there is no plan at the moment. “But these are certainly things that are in the realm of possibility. These are possibilities in the future,” he added.