ITC: Enduring Value

Sab Saath Baadhein

Media Centre

ITC may invest up to Rs 1k cr in 4 yrs on FMCG business 25 Jan 2012

Financial Chronicle

Diversified business group ITC is understood to be gearing up to invest up to Rs 1,000 crore in the FMCG segment in the next four years which will include setting up new facilities and enhancing existing capacities.

According to UBS Investment Research, which had met the company's top management recently, ITC is planning to invest Rs 600 crore to Rs 1,000 crore in the next three years.

The Kolkata-based company did not confirm the figure but said it will invest in building state of the art manufacturing facilities, logistics as well as ramping up existing capacity.

"Given the rapid growth of the fast moving consumer goods segment in India which is expected to triple in size in the next 10 years, ITC is pursuing an aggressive investment led growth strategy,"ITC Executive Director Kurush Grant told PTI.

Without confirming how much the company plans to invest, Grant said ITC is investing heavily in technology and manufacturing, fixed assets, brand building, R&D, product development and consumer insights to build market standing.

"We will invest in building state of the art manufacturing facilities, logistics as well as ramping up existing capacity," he added.

The UBS Investment Research report, however, said "(ITC's) losses in other FMCG are coming down, but they (ITC management) warn that the new food businesses will involve higher investments; Rs600 crore to Rs 1,000 crore over the next 3-4 years."

Under the FMCG division, ITC sells branded packaged foods under the brands Bingo, Sunfeast and Yippee among others, personal care range like Vivel and Fiama di Wills apart from stationery products, cigarettes and lifestyle apparel.

Over the last few years company has rapidly scaled up its FMCG businesses and has entered in new categories over the last few years like instant noodles, pasta, biscuits among others. In the quarter ended December 31, 2011 its FMCG business registered a revenue of Rs 4,603.66 crore, witnessing a growth of 19 per cent over the previous fiscal.

"This expansion of the FMCG portfolio not only requires establishment of new manufacturing operations but also creation of efficient supply chain, enhancement of logistics infrastructure and efficient multiple distribution channels across multiple locations," Grant said.

© ITC Limited