ITC to 'box its way' in FMCG competition - Business Standard
July 28, 2012
May enter nutritional segment plans Rs 25,000-cr investments in 5-7 yrs
Cigarette-to-hotels conglomerate ITC Ltd will take international firms in the non-cigarette fast moving consumer goods (FMCG) space head-on through creation of Indian brands and foray into new segments.
The company plans to invest Rs 25,000 crore over five-seven years that will make it a power house of home-grown brands. "We want ITC to be Indian trademark corporation, a storehouse of valuable brands," ITC Chairman Y C Deveshwar said, outlining his vision for the multi-business conglomerate at a press conference following the annual general meeting.
More than 40 projects, across hotels, logistics and the FMCG space, are already under implementation. "The firm has lined up a step-by-step plan of investing Rs 3,500 crore every year. This year, we have already invested Rs 2,700 crore," Deveshwar added.
The company is looking to add yet another business area, dairy, which could involve an investment of Rs 400-500 crore.
ITC will be take its Munger Dairy and Social Development project, which started off as an animal husbandry programme, to the next level. "The project has increased the productivity of milk in the area, which now needs to be processed, so that it gives adequate returns to farmers," the chairman said.
Earlier in the day, at the company's annual general meeting, Deveshwar hinted at a possible foray into the nutritional market, announcing that several long-term research platforms had been designed to create "unique nutritional interventions" that can address cardiovascular health, diabetes and cognition. "It could be a drink or food. Now, it's just a research and development effort for future brand interventions."
Speaking to the shareholders, Deveshwar explained ITC's foray into the non-cigarette FMCG sector was a success as it was able to create brands with a value Rs 18,000 crore within a short span of time.
"Every time we use an international brand, seven-eight per cent royalty goes abroad. It's very difficult to dislodge them and establish new brands, but we will compete with them," he said. "You should be happy here is a champion who is willing to get into the arena and box its way through." The firm's major non-cigarette FMCG brands include packaged food products like Aashirvaad, Sunfeast and Candyman and personal care brands like Fiama Di Wills, Vivel and Superia, while it has a wide kitty of lifestyle, stationery and other brands, too.
