ITC To Enter New Categories, Consider Buyouts, Says Sanjiv Puri

ITC Ltd. will enter new categories and consider acquisitions as it continues its focus on consumer goods, Sanjiv Puri said in his first speech as chairman of cigarette-to-hotels conglomerate.

ITC targets to be the leader in every segment it operates in, Puri said, adding the company aims to be an engine of growth for the Indian economy through a vibrant portfolio of “future-ready businesses”.

Around a quarter of ITC’s consumer goods revenue comes from newer businesses, he said. To accelerate growth, the company will not only fortify the existing categories but will also “foray into newer categories and sub-segments,” he said. “This would be supported by multi-dimensional investments as also strategic opportunities for acquisitions.”

Share of cigarettes in its top line has been falling. In the year ended March, staples, biscuits, frozen foods, organic purees, soaps, paperboards and hotels contributed more than half of ITC’s gross revenue.

Puri was named chairman and managing director in May this year after the death of his predecessor. YC Deveshwar, the longest-serving head of an Indian company, was at the helm of ITC for more than two decades. Puri, however, has been the chief executive officer since February 2017.

Here’s what he said at ITC’s 108th annual general meeting:

Expanding Businesses

• Fast-moving consumer goods segment has a tremendous potential, given the growing affluence, low penetration and per capita consumption levels with favourable demographics.
• ITC to foray into newer categories and sub-segments that are synergistic.
• Agri business is increasingly focusing on value-added products in the fresh, frozen, perishables and dehydrated formats.
• Adding capacity and innovative products will continue to provide a fillip to the paperboards unit.
• ITC pursuing asset-right strategy to accelerate growth and drive profitability in hotels business.

Improving Reach

• ITC’s formidable distribution network helps it place products in more than six million retail outlets.
• It has superior capacity to launch diverse products across different markets and channels.
• The company will add new markets and outlets to its servicing base to accelerate growth.

Brand Focus

• Aashirvaad is today has annual consumer spend of Rs 4,500 crore and Sunfeast Rs 3,800 crore.

Building Assets

• Investing in infrastructure to rapidly scale up the FMCG businesses.
• Recent investments in paper business to help substitute imports.