Diversified consumer company ITC Ltd. is gearing up to achieve an ambitious target of growing its FMCG (fast-moving consumer goods) business 10-fold to ₹1,00,000 crore by 2030, CEO and Executive Director Sanjiv Puri said.
He was interacting with The Hindu Group’s journalists here on Thursday.
“In the last decade (1996-2017), the story of the firm has been one of transformation through forays into FMCG besides strengthening its hotels and paper business,’’ he said. In that period, the firm’s overall turnover grew 11-fold to ₹55,002 crore. The market capitalisation also increased 65-fold to ₹3.8 lakh crore (as on May 29), he pointed out.
“In FMCG, we took a conscious decision of creating the entire value chain in India though other routes such as technical tie-ups and franchise were available. The thought process was to add value and inclusively contribute to the society,” Mr. Puri, who took over as CEO earlier this year, said.
While the strategy meant more investments and longer gestation periods, he said the company chose to pursue this path as it would fetch long-term benefits, create multiplier effects and result in job creation.
Stating that “it is an aspirational target,’’ he, nevertheless, admitted that there were challenges aplenty. Yet, he asserted that the FMCG sector held enormous growth potential for the company. In the last 10 months alone, ITC had forayed into different categories such as chocolates, coffee, dairy products.
Also, it had been focusing on creating various sub-categories in juices and biscuits and investing heavily, he added. “There is tremendous opportunity in food processing because the level is very low now. With one million people getting into the job market every month, FMCG is one way to create jobs,” Mr. Puri added. ITC, according to him, is the third largest and fastest growing brand in the food segment.
Mr. Puri indicated that ITC would soon get into seafood under the brand ITC Master Chef. It would start with ‘Super Safe’ shrimps which met global and Indian quality standards and add more products as it progressed, he said. The firm would also expand its presence in the fruits and vegetable value chain, he added.
On the hotel business, Mr. Puri said ITC had preferred an asset-heavy strategy to an asset-light model. “We know our gestation period is going to be high because our model is asset-heavy. But we have a long-term view on India and the benefits will be huge. It is about being asset-right.”
He said the liquor ban on the highways was hurting the hotel business the most in Tamil Nadu. “Our footfalls have been hit and it will have a huge impact on tourism industry.”
With non-cigarette businesses growing at a faster clip, Mr. Puri said growth at the flagship segment would not be dramatic.
“Cigarette is a highly taxed industry in India. As a result, the consumption is coming down when compared to other illicit means. I expect the trend to continue.”
