FMCG major ITC will continue diversification into new areas with agri business set to play a key role, as part of its ‘India First’ strategy under which it aims to create 10 million sustainable livelihoods by 2030, according to company CEO and Executive Director Sanjiv Puri.
According to a PTI report: Very soon, the company will start selling potatoes and onions as it tries to bring ‘one more commodity to the market every few months’, even as it is in the process of assembling a team for its foray into healthcare sector.
“We would like to go forward with growing contribution to the economy on areas of national priorities… One of the objectives was to make growing contribution to the economy, which means getting into newer segments,” Puri was quoted by PTI as saying.
He said ITC’s strategic objective will be to move beyond “shareholder value to societal value building on the foundation of shareholder value”, PTI reported.
Under the company’s India First strategy, ITC is planning to strengthen businesses and value chains to create 10 million sustainable livelihoods by 2030.
At present, ITC and its group firms employ over 32,000 people directly and have supported creation of around 6 million sustainable livelihoods.
Identifying agri business and value chains as key focus area, he said ITC is preparing for the next generation of e- choupal, its rural Internet based network for farmers through which it procures agri and aquaculture products.
“We are creating a better alignment between the market requirement and the supply side and e-choupal becomes the fulcrum because of its digital infrastructure for all this,” Puri was quoted by PTI as saying.
He further said ITC’s investments in agri back-end will take care of scaling up in the existing categories, while newer categories will also increase the company’s interface with the agri back-end.
Elaborating on the company’s new steps in the area, Puri told PTI: “Going forward, from items like potato and wheat, increasingly our focus is going to be on fruits, vegetable and sea foods”.
“The idea is that every few months, we would bring in one more commodity to the market, very soon we are going to launch potatoes in fresh form,” he was further quoted by PTI as saying.
ITC’s potatoes will have two unique offerings – one is going to be low sugar potato and other is going to be anti-oxidant rich potato.
“We are also working on onion dehydrates and this foray should happen before the end of the year. We will bring it to the market before the end of the year,” Puri told PTI.
At its AGM in July this year, ITC had announced to enter into the fruits, vegetables and other perishables segment in fresh, frozen and dehydrated form as part of its drive to build an agri based industry for the future.
The company has recently introduced frozen prawns and has plans to expand its sea foods portfolio.
Puri said ITC is focused on leveraging on synergies of its enterprise strengths as part of its overall strategy.
“When we have hotel business and agri business and the trade marketing of the traditional business, we are able to integrate competencies effectively to support a new business like foods,” he was further quoted by PTI as saying.
When asked about ITC’s plans to foray into healthcare, he said currently the process is on to build a team and the company would announce details when it is ready.
Besides, ITC is also harnessing the potentials of the FMCG segment, where it believes “market opportunities are tremendous” as per capita consumption is extremely low.
“This is a tremendous opportunity. Food particularly is a big opportunity because just 2-3 per cent of our fruits and vegetables are processed in India,” he told PTI.
ITC is currently in the process of setting up 20 integrated consumer goods and logistics hubs, as part of its Rs 25,000 crore investment to create physical infrastructure to enhance its competitiveness across business segments.
“We have 65 projects with an investment of Rs 25,000 crore in various stages. Some significant sectors include creating 20 integrated consumer goods and logistics hubs to provide scalability and lowest cost of delivery and the capacity to provide the consumer the freshest product,” he was quoted by PTI as saying.
Three of them are already operational and in the next three months two more would be operational, he added.
In hospitality, ITC, a youngest player in the segment, is investing to create 9 new hotels in India and one in Sri Lanka.
ITC now has 58 per cent of its revenue from the non- tobacco segments, which are FMCG, hotel, agri business, paper & paper board as part of its diversification strategy.
“One of the objectives was to make growing contribution to the economy, which means by getting into newer segments… Our non-tobacco revenues today are 58% and its the diversification which we are really trying very hard that is evident from the fact nearly 80 per cent of our capital employed is in non-tobacco,” Puri told PTI.
ITC had a turnover of Rs 55,002 crore in FY 2017.