Diversified conglomerate ITC is looking to ramp up exports of its value-added FMCG products to international markets, chairman and MD Sanjiv Puri said on Wednesday.
Addressing shareholders at the company’s annual general meeting, Puri said in recent years, the company has established distribution arrangements abroad, enabling appreciable progress of exports of its “Proudly Indian” brands to over 60 countries. Over time, such exports will make a substantial contribution to the growth of the company’s value-added FMCG portfolio, he added.
“As we achieve scale for your company’s FMCG portfolio, it is also our aspiration to take these world-class brands to the overseas markets,” he said.
The cigarette-to-soap maker’s portfolio of non-cigarette FMCG brands represented an annual consumer spend of over Rs 24,000 crore for the last financial year, registering a growth of around 9% year-on-year. The portfolio of non-cigarette FMCG brands, which includes Aashirvaad, Sunfeast, Yippee!, Bingo!, Savlon and B Natural, among others, had witnessed an annual consumer spend of over Rs 22,000 crore for FY21.
“The carefully selected portfolio, with substantial headroom to grow, is estimated to have a total addressable market potential of Rs 5 trillion by 2030, which is among the highest in the Indian FMCG space,” Puri said.
The company said the FMCG landscape and consumer access points are transforming rapidly. And, in order to stay ahead of the curve, the company continues to invest in future-ready capabilities to develop new routes to market with strategic partnerships, whilst expanding the breadth, depth and effectiveness of its distribution infrastructure.
ITC’s products are available in nearly 70 lakh outlets through its omni-channel network.
Chairman Puri emphasised that despite the “unprecedented inflationary headwinds”, the company’s non-cigarette FMCG business sustained Ebitda margins last fiscal and also showed an improvement of 650 basis points over the last five years.
Replying to the shareholders’ queries, Puri said the conglomerate’s “younger businesses” are non-cigarette FMCG and information technology (ITC Infotech), and both hold “immense promise” for value creation in future. ITC Infotech is a wholly-owned subsidiary of ITC.
At its first-ever institutional investors and financial analysts’ meet in December last year, the conglomerate had not ruled out the possibility of listing of ITC Infotech on the bourses. The company had also earlier said it had started to look at “some alternate structuring” to enhance “value creation” for its hotels business.
On Wednesday, Puri told shareholders: “We are looking at alternate structures for hotels. Because of the pandemic, we kind of put it back. And we have said that in line of industry recovery, we will take it forward and the industry seems to be in positive trajectory now. So, that’s where it stands.”
On reviewing the organisational structure, he said the company is “absolutely open” and it will objectively evaluate what is in the best interest of shareholders. “There is also a suggestion regarding the IT subsidiary (ITC Infotech)…areas like IT subsidiary can certainly be done at the appropriate time. But, what is more important is that we are able to organise ourselves for a sustained growth…so we are flexible and open about it and we keep on evaluating this year-to-year and when there will be right time to such things, I am sure it will be appropriately discussed and at the board and then the decision will be taken,” he pointed out.
ITC said that notwithstanding the near-term challenges, the company continued to deliver “robust growth” across all business segments, though inflation remains a “key monitorable”. “While it is heartening that India has responded to the pandemic with admirable resilience, global risks have got accentuated with geopolitical tensions and severe economic stress caused by untamed inflation and supply-side disruptions,” Puri said.
ITC touched a new 52-week high of Rs 299.55 on Wednesday and finally settled at Rs 298.10 apiece, up by 1.24%.