ITC: Enduring Value

Sab Saath Baadhein

Media Centre

Marubeni, ITC tie up for foods business 26 Dec 2006

Financial Express

FMCG major ITC Ltd and Japanese trading house Marubeni Corp are to form a comprehensive alliance that will extend Marubeni’s international marketing reach to ITC’s agri-commodities sourcing business. The two companies are not considering an equity tie-up.

Tokyo daily Yomiuri said Marubeni and ITC were considering expanding the pact to apparels and chemicals.

ITC will bring in Marubeni’s warehousing and logistics skills to its plans for becoming the back-end supply chain for big names planning to create food retail chains in India.

A Marubeni spokesman said in Tokyo the alliance would focus on the food business, but the companies had not yet decided on details. Marubeni will also help export grain produced in India.

S Sivakumar, chief executive of ITC’s international business division, told FE that, in the short-term, the activity would be for items like soyabean meal, in which Marubeni had a good network of customers in Asia, while ITC’s e-Choupal business had a good sourcing network.

“Japan has opened its market to imports of mangoes last year, and once the new season starts we will start exploring those exports also,” Sivakumar said. Japan had earlier disallowed imports of mangoes on sanitary and phytosanitary grounds.

“We will also be looking at warehousing and logistics within India, because they have a certain technical competence in this area,” he said.

He said ITC already had drawn up a business plan for being the supply chain for many retail majors, but declined to name those it was talking to.

© ITC Limited