Going beyond cigarettes: Puri says creating the new ITC
ITC Ltd, the cigarettesto-shampoo company, is working on an eight-point strategy to reinvent itself and focus on growing faster in its non-cigarette businesses, especially branded packaged foods – a segment it entered 15 years ago, chief executive Sanjiv Puri said on Monday.
The “create the new ITC” strategy is part of the Kolkata-based company’s plan to reach ₹1 lakh crore in revenue from its non-cigarette packaged goods business by 2030, Puri said. The growth in the branded packaged food business will be fuelled by the company’s foray into fruit, vegetables and sea food, adding one new product every quarter.
The company has also lined up an investment of ₹25,000 crore in 65 projects, including 20 integrated factories for consumer goods with logistics facilities, covering an area of 28 million square feet. Of these, three units will be operational this year.
“Given the fact that the capital employed, and people, is disproportionately higher in new business areas, essentially fast moving consumer goods, we’ll grow there faster. We also hope to see the economy get into a new growth trajectory (leading to higher consumption), and we’ll have a faster growth, essentially the non-tobacco segment,” Puri said in an interview.
About 80% of ITC’s capital expenditure is in the non-cigarette business which employs 88% of the company’s total headcount, according to a company statement. In the year ended 31 March 2017, cigarettes accounted for ₹34,001.98 crore of the company’s total revenue of ₹55,001.69 crore, according to ITC’s filings with BSE. ITC has no plans to shift focus from its traditional tobacco business, Puri said.
Under the eight-point strategy, ITC wants to bring in products and services that are “superior, very distinct or differentiated or new in the market to address future needs of the consumers, backed by significant investments in R&D, make strategic investments in creating physical infrastructure and capacity building that would help the company stay closer to the retail market, said Puri.