ITC chairman YC Deveshwar, who got shareholders’ nod on Friday to continue as chairman for the next five years – he was due to retire next year – said the company’s planned R23,000 crore investment in various businesses “is running behind schedule.”
Last year, he had announced the investment, setting a timeline of five years. “Most of our projects have been sanctioned,” Deveshwar said at the post-100th AGM press conference, “but I am not happy with the pace of execution.” He said the reasons lay outside of ITC, “for one we need multiple clearances... but if not five years, we would have made the investment in six or six-and-a-half years.” The company operates various businesses from cigarettes to hotels, along with paperboards to agriculture. He said in the next five years, the non-cigarette FMCG business will make “fairly handsome profits.”
ITC, which announced its Q1 results on Thursday, has pared down its non-cigarette FMCG losses 14% to R76.28 crore. “The non-cigarette FMCG business is an aggregate of a number of businesses and not all product ranges are making losses. We are entering new product lines and that means a tremendous amount has to be spent on advertising and marketing and that’s eating into profits,” he said. To a question on the succession plan, Deveshwar said the “long-term wellbeing of the company led me to decide to stay on... it’s in the best interests of ITC. We need to find a successor to take it on.” Deveshwar said the nominations committee has been charged with responsibility of finding a successor. “They will be looking for a person with values and vitality with wide bandwidth.” he said.
To commemorate 100 years of ITC, the chairman announced a special dividend of R1.65 per share in addition to a dividend of R2.80 per share for the year ended March 31, 2011. Total cash flow for this will amount to R4002.09 crore.