ITC Expects Consumer Spending To Shrink In FY21 Due To Covid-19 Crisis
ITC Ltd. expects consumer spending to shrink in the ongoing financial year as the economic disruptions caused by the Covid-19 pandemic dent livelihoods across India.
The pandemic has caused unprecedented disruption to economic activity the world over, plunging an already slowing global economy into a recession, Sanjiv Puri, chairman of the cigarettes-to-consumer goods maker, told shareholders of the company at its 109th annual general meeting on Friday. Global GDP growth, the company said, is estimated to contract by 5-7%—the deepest recession since the Great Depression nearly a century ago.
Puri outlined three phases to reimagine the future:
- Survival phase, as corporates manage the ongoing crisis.
- Reboot phase, as businesses align to the new normal.
- As the crisis ebbs, corporates will have to gear up for the “next normal”, with some trends moderating, some remaining at an elevated level and others recovering, while new opportunities and industry dynamics get constantly redefined.
The maker of Bingo chips made substantial investments in its digital ecosystem across its manufacturing, product quality and supply chain agility. It also launched an online ordering system for retailers to address a surge in demand during the pandemic while also collaborating with companies such as Domino’s Pizza, Swiggy, Zomato and Dunzo for delivery of its products.
Puri also told shareholders that the company expanded its product portfolio during the lockdown. ITC added hygiene products under the Savlon brand and launched a fruit and vegetable disinfectant, Nimwash, as well as new food products. The company expanded manufacturing of its hygiene products to cater to the surge in demand. It also repurposed its perfume manufacturing facility in Manpura, Himachal Pradesh, to produce sanitisers.
“ITC is stepping up farmer engagement in wheat, potato, chillies and fruits and vegetables through a crop value chain cluster model to connect small farmers to markets,” Puri told shareholders.
The company expects to support nearly 3,000 farmer-producer organisations with more than a million farmers across 24 crop value chain clusters in 21 states. These value chains will be anchored by ITC’s investments in food processing, its brands as well as exports, Puri said.