ITC bullish on hotels, paper businesses

The overall growth of the first quarter of 2009-10 may have been muted at 4.7%, largely because hotels and agri businesses have not done well, but ITC chairman Y C Deveshwar said the company was bullish about its hotels and paper businesses.

At the company?s 98th AGM on Friday, Deveshwar said though it was not interested in any hostile takeovers, it was looking for opportunities to acquire properties at reasonable prices in the time of a downturn in the hotels business. He said: ?We are hungry? we are willing, able and ready to make investments in two of our businesses, paper and hotels.? He said the company could spend close to Rs 8,000 crore over the next 8-10 years to expand the hotel business.

?The recession stage will not last long. The revival of growth will reflect in better occupancies,? he pointed out.

Wherever possible, ITC will build its own hotels or else it is also exploring ways to run operations and market hotels owned by others.

?The majority partnership will be with someone else, we will own a 25-26% stake,? he explained.

At the AGM, to a shareholder query, Deveshwar said investments in EIH and Leela Hotels were ?good investments?, adding, ?though we are not interested in any hostile takeover, if the other side thinks joining hands with ITC is good, the holdings will come in handy.? ITC holds 14.98% in EIH and a 4% stake in Leela. Over the next few years, the company plans hotels in Hyderabad, Ahmedabad, Amritsar, Bhubaneshwar, Coimbatore, Gurgaon and Bangalore. ?We are opening the largest hotel in Chennai next year and a new one in Bangalore which is ready, but we are waiting to launch it because the timing is bad,? he added. ITC has 2,900 rooms in the luxury space and 6,000 rooms overall.

With the paper industry also registering 5-6% growth annually, the company is exploring opportunities to set up a greenfield new paper and packaging project of a substantial size in either Gujarat or MP or Andhra Pradesh. The project spread over 1,500-2,000 acres will require an investment of Rs 4,000-odd crore over several years.