ITC:100 not out! - The Economic Times
August 24, 2010
India's Leading Multi-Business Conglomerate Turns 100 Today
HAPPY 100th birthday, ITC! India's one of the largest multi-business conglomerates completes century of existence on Tuesday, August 24, 2010.
To mark the day, company chairman Y C De veshwar will address its close to 29,000 employees across the country through a webcast from ITC Sonar, Kolkata.
ITC also plans to unveil a special anthem on the occasion, company officials said. "We are celebrating the inspiring journey of 100 years and renewing our pledge to take the company to even higher orbits of growth in the future, never losing the inspiration to put country before corporation always," says Nazeeb Arif vice-president -corporate communications, ITC.
Also, as part of the centenary celebrations, ITC which has a market capitalisation of nearly Rs 1,14,000 crore, is giving away one free bonus share for each of its shares held.
That's a long, long way for a company regis tered as the Imperial Tobacco Company of India on August 24, 1910, with an authorised capital of Rs 1,000 in ten shares of Rs 100 each.
That was not the start of the ITC story in India though. It started four years earlier, when two English gentlemen -- Jellicoe and Page - travelled from London to Calcutta, looking for an agent for Scissors and other W.D & H.O Wills' cigarette brands in India.
They combed the business district of Kolkata but it was hard to find anybody interested in ciga rette at a time when the cult of blends, pipes pouches with Turkish and Virginia cigarettes was in vogue.
Finally, a small-time agent with little money Buksh Ellahie, stepped in with borrowed money from a courtesan whom he married later.
And Ellahie, as the first agent of Wills, started the journey of ITC.
A lot has changed since then. The company was run by Britishers till well after the country' Independence in 1947.
It got its first Indian manager in 1934 in Abdur Sardar Hussain, while its first Indian chairman was Ajit Narain Haksar in 1969.
It was Haksar who took the lead in Indianising the company as well as the management, says Champaka Basu, corporate historian and author of 'Challenge and Change: The ITC Story 1910-1985'.
"He not only explained the complexities of the Indian social, economic and political environment to the parent company BAT, but also suggested steps ITC should take to ensure its profit and growth," says Ms Basu.
In fact, ITC started looking beyond tobacco under his leadership, when it entered the hotel business in 1975.
Today, ITC has interests in hotels, apparel, rural retailing, finance, packaged food, personal care, stationery, paperboard, packaging and printing, safety matches and even information technology.
Jagdish Narain Sapru, who succeeded his brother-in-law Haksar as ITC chairman in 1983, too played a key role in the tobacco major's journey to be among the largest corporates in the country.
"While Mr Haksar unleashed the company's intellectual freedom, Mr Sapru developed and honed its emotional intelligence," says Zahid Gangjee, an HR consultant who worked in ITC under both Mr Haksar and Mr Sapru.
Thanks to Sapru, few people left ITC as employees felt a psychological ownership towards it businesses, he adds.
ITC broke the 'Imperial' connection in 1970 when it changed its name to India Tobacco Company Ltd. It again changed name to I.T.C. Ltd in 1974 and finally to ITC Ltd (without full stops) in 2001.
And ITC sees no full stop as it starts a new century.
When Y C Deveshwar took over in 1996, ITC was experiencing an unenviable mix of challenges: its cigarette business had been slapped with a retrospective excise duty demand of Rs 803 crore, its diversification into hotels and paperboards had not reached fruition for want of adequate investments, its recent forays into financial services, edible oils and international trading were still incurring losses, the weak diversification performance was facing severe criticism and last but not the least, a battle for control of the company arose. The newly-constituted board of directors led by Mr Deveshwar became busy rationalising, restructuring and repositioning the company for international competitiveness.
From a single-product company, ITC has transformed itself to one of India's largest multi-business corporate enterprises. It is a leading FMCG marketeer, market leader in the Indian paperboard & packaging industry, the second largest hotel chain and a leader in establishing new benchmarks in responsible luxury, as well as the country's foremost agri-business player pioneering rural transformation through its path-breaking e-Choupal initiative.
Last month, at the company's 99th annual general body meeting (AGM), Mr Deveshwar said, As the company steps into its next century, the critical question to ask ourselves is: Is ITC future ready? It is my belief that the answer to this question is an emphatic 'yes'."
He said the company has architectured organisational hardware and software over many years to ensure sustainable competitive advantage.
"ITC's portfolio has strategic assets like power brands, trade marketing & distribution infrastructure, deep linkages to rural India," he said.
As part of its centenary initiative, ITC's education & stationery products brand Classmate has launched a programme 'Classmate Ideas for India Challenge' that invites ideas from the youth to help transform the India of tomorrow.
The company also has big investment plans for the future. It plans to invest Rs 23,000 crore over the next 7-10 years including Rs 8,000 crore in FMCG, Rs 6,000 crore in, paper, paperboards & packaging and Rs 9,000 crore in hotels.
Sure, ITC has every reason to believe it's future ready as it enters a new century.
