ITC Paperboards and Specialty Papers Division - ITC Plans 23K - Crore Investment

ITC Plans 23K - Crore Investment

Jul 21 2010

YC Deveshwar at a press meet in the city on Friday. MULTI-BUSINESS conglomerate ITC Ltd has lined up a whopping 23,000-crore investment plan for the next 7-10 years to scale up its fast-moving consumer goods (FMCG), paper, paperboards and packaging, and hospitality businesses.

Addressing shareholders at the company’s 99th AGM in Kolkata on Friday, ITC chairman YC Deveshwar said: “India is a young country. Its economy is growing at a fast pace. The country is forecasting 8.5% growth and we are ready to cash in on the opportunity.”

Elaborating, he said, the FMCG sector in India is expected to treble in size to over 355,000 crore by 2018. The chairman said he can “sight an investment opportunity of up to 8,000 crore over the next 7-10 years to drive growth in the FMCG sector” and of 6,000 crore in the paper, paperboards and packaging segment. “At conservative estimates, India needs 50,000 rooms in the next two-three years. This sector, too, carries an investment opportunity of up to 9,000 crore in next 7-10 years to fuel growth. Of this, the company would prefer to invest in high-end, seven-star super luxury hotels. We are, however, not averse to investing in the Fortune chain of hotels,” the chairman said.

On the group’s plans to take its hospitality business overseas, Mr Deveshwar said: “If there is an opportunity of a good buy, we have the resources to acquire overseas.”

ITC will not require funds to finance its proposed investments. The company has the ability to borrow nearly 16,000-17,000 crore if need be.

On the company’s plans to enter into new businesses, the ITC boss said: “As of now, ITC’s hands are full. At present, the company does not see itself getting into a totally new area of business. We will grow within the existing businesses but enter new product categories. Going forward, we will blend our core competencies in different businesses and converge our R&D capabilities to deliver future products aimed at nutrition, health and well-being.”

Asked about the future performance of the FMCG businesses, Mr Deveshwar said: “The company’s branded packaged foods business and the education and stationery business will turn around this year. Our agarbattis business is already making a marginal profit while the personal care business is very nascent.”

Regarding the company’s safety matches business, Mr Deveshwar said: “The business has been hit by the skewed tax structure. We are restructuring the business and want to outsource it to smallscale sectors. But we want to do it gradually. We expect the matches businesses to turn around in 2010-11.”

The company may shut down its match box manufacturing unit in Chennai and has already given voluntary retirement to all its employees. “Voluntary retirement has been given to the people and they have all accepted it,” he said but clarified that the company has no plans to shut down the manufacturing unit of Wimco in the city. The company might use the Chennai factory land for some other business.

In response to a shareholder’s suggestion that the company should enter into the healthcare business, Mr Deveshwar said: “We have no plans.” Though the healthcare business is related to health, well-being and hospitality and is hospitality for the sick, the company has no plans to get into the business.
Registered Office: ITC LIMITED, 37 J. L. Nehru Road, Kolkata - 700071, India Ph: +91-33-22889371 | Corporate Identity Number: L16005WB1910PLC001985