Sanjiv Puri, the chairman of ITC, has laid out the growth roadmap for the country’s biggest cigarette maker and there’s a big push on expanding the company’s non-cigarette FMCG business.

“Today, around 25 percent of ITC’s segment revenue is from the newer FMCG businesses. Your company’s vibrant portfolio of brands represents an annual consumer spend of over Rs 18,000 crores,” said Puri while addressing his first annual general meeting (AGM) as the chairman of ITC.

There was no mention of the cigarette business, which accounts for more than three-fourths of the company's operating earnings, by Puri at the AGM as the company is trying to shift its focus to the FMCG segment.

ITC is rebounding from a prolonged period of tax hikes and a regulatory clampdown on smoking. The government has been trying to create public awareness on tobacco-related health issues.

The $11 billion Indian cigarette market is dominated by three players with ITC at the top followed by Godfrey Phillips India and VST Industries, according to a report by brokerage Anand Rathi.

Puri said the company’s brands like Aashirvaad, Sunfeast and Bingo generated revenues worth Rs 4,500 crore, Rs 3,800 crore and Rs 2,500 crore, respectively.

During the year, ITC launched 50 products to expand new categories as well as to enter new categories. The company is in the process of developing a range of ‘good for you’ or ‘free from’ products in the health and wellness space.

The 20 new manufacturing facilities, which are under construction at present, will enhance economies of scale and bring about cost efficiency.

To build scale and accelerate growth in the business, ITC said that it is open to acquisitions and investments in the FMCG space.

On the agribusiness front, ITC’s focus is on value-added products in the fresh, frozen and perishables space and as far as the hotels business is concerned, the company is looking at following an asset-light strategy.

“A combination of managed and owned assets will help ITC drive growth and profitability”, said Puri.

ITC is also betting big on digital space. It is engaging with the start-up ecosystem to gain from innovative capabilities and developing new products.

The company has also formulated a business-wise digital strategy to bring about better efficiencies. Under the strategy, ITC is experimenting with technology like Industry 4.0, artificial intelligence, data analytics, robotics.

First Published:Jul 12, 2019 2:29 PM IST