It was Deveshwar’s genius to come up with the idea that shops selling its cigarettes could also sell its FMCG products, reaching the interiors of the country.
A line from Alfred Tennyson’s poetry perhaps best sums up the metamorphosis of ITC from the days of Kishan Lal Chugh to Yogesh Chander Deveshwar, who died Saturday morning at the age of 72: “The old order changeth, yielding place to new…”
However good the company may have been in the days of chairmen AN Haksar or KL Chugh, had change not taken place in the form of Deveshwar, ITC may have become irrelevant by now. It was Deveshwar, who joined ITC in 1968 and went on to become chairman and chief executive in 1996, who put the house in order when pre-liberalisation legacy issues and poorly planned diversification came to haunt the company.
The boardroom battle between ITC’s principal shareholder British American Tobacco (BAT), which was keen to take control, and then chairman Chugh created a mess that is now part of Indian business history. For those following the developments in 1996, news and pictures of Chugh and his predecessor Jagdish Narain Sapru being produced in a Kolkata court and their remand in custody on charges of violating the Foreign Exchange Regulation Act are still fresh in memory. At that time it seemed all was over for ITC, But the company emerged from it all and transformed itself from a chiefly cigarette making firm into a multi-business conglomerate.
It gained significant presence in areas of FMCG, hotels, paper and packaging, agri-produce, branded apparel, lifestyle retail, packaged foods and personal care, for which credit goes to Deveshwar.
It was not that ITC did not have interests other than cigarettes before him; it’s just that the thrust and direction the company got under Deveshwar were missing earlier. The share of non-tobacco business in the overall revenues was less, which started growing under his guidance and stewardship. Just for perspective: In FY18, ITC’s gross sales value increased to Rs 67,081 crore and it posted a net profit of Rs 11,223 crore. During the year, the non-cigarette FMCG business revenue was Rs 11,328 crore, while the gross profit of the business was Rs 164 crore. Deveshwar’s vision was to grow the non-cigarette FMCG business revenue to Rs 1 lakh crore by 2030 and become the largest FMCG player in the country, beating current numero uno Hindustan Unilever. Both companies were fierce competitors in also trying to catch the best talent emerging from business schools.
It was Deveshwar’s genius to come up with the idea that shops selling its cigarettes could also sell its FMCG products, reaching the interiors of the country. Deveshwar had one more quality that distinguished him from many successful CEOs. From 1991 to 1994 he went on to head Air India as its chairman and managing director and this experience gave him insights into managing the political environment, a trait which is no mean achievement in the country, and perhaps which helped him in staying ahead in a race amongst equals. In 2011, he was conferred the Padma Bhushan.
Suffering from ill health, Deveshwar ensured a smooth leadership transition. He stepped down from the executive role of CEO in February 2017 and was appointed by the board as non-executive chairman till 2022. ITC appointed Sanjiv Puri as the CEO and managing director.
In his condolence message, Puri said, “Inspired by a patriotic fervor, manifest in his clarion call of ‘let’s put India first’, he led ITC’s strategic thrust to create an exemplary Indian enterprise dedicated to serving national priorities.”
President Ram Nath Kovind tweeted: “Sad to hear of the passing of Shri YC Deveshwar, a stalwart of Indian business and a builder of Indian brands. His emphasis on sustainability and the triple bottomline will remain ever influential. My condolences to his family and colleagues in ITC and beyond.”
Prime Minister Narendra Modi wrote on Twitter: “Shri YC Deveshwar made a strong contribution to Indian industry. His efforts helped ITC become a professionally-run Indian company with a global footprint. Saddened by his demise. My thoughts are with his family, friends and the ITC group in this hour of grief.”
(—With inputs from Mithun Dasgupta)